After a difficult 2021 for Cathay Pacific in which its capacity was down 61.8% versus 2019, the Hong Kong-based airline is steeling itself for a year that could potentially be worse.
Cathay is facing two major headwinds: Airlines around the world are anticipating a slow recovery in Asia as many markets in the region remain largely closed in an effort to prevent the spread of COVID-19; and Hong Kong authorities are being particularly stringent, tightening COVID-19 protocols for incoming flight crews and requiring all crew to quarantine at a designated hotel for three days, even if they are vaccinated, test negative for COVID-19 and have no symptoms.
The new crew rules were put in place at the beginning of the year after Hong Kong officials publicly blamed a returning Cathay pilot for introducing the omicron variant of COVID-19 to the island city.
“These measures will have a significant impact on our passenger and cargo flight capacity,” Cathay CEO Augustus Tang said in a Jan. 24 update released by the carrier. He noted that January passenger capacity has been lowered to around 2% of pre-pandemic capacity.
Unless Hong Kong, which earlier this month banned all flights from eight countries—including the UK and the US—eases both passenger entry requirements and crew quarantine rules, Cathay may be limited to operating even less capacity in 2022 than in 2021.
“Regrettably, the capacity reduction will have an impact on Cathay Pacific’s business and we have been evaluating the potential impact of these measures on our operations and cost base,” Tang said.
Cathay said earlier this month that it would be operating a “skeleton” schedule in January.
“Until conditions improve, we are doing everything in our power to maximize capacity,” Tang said, adding: “We will strive to maintain passenger connectivity with key destinations, although at reduced frequencies … While passenger flights to the Chinese mainland will remain largely unaffected, capacity to the rest of the Cathay Pacific network will see a reduction to ensure continued compliance with the latest government measures. We will also leverage the capacity provided by our low-cost subsidiary HK Express to maintain connectivity with a number of regional destinations.”