Cathay Pacific has cut staff and shut a subsidiary. Photo: iStock

Cathay Pacific cut its economic outlook on Friday following a second successive drop in monthly passenger traffic after the airline faced a backlash from Beijing over Hong Kong’s heated pro-democracy protests.

The marquee brand has had a torrid few months, coming under fire from Chinese state media and authorities because some of its 27,000 employees took part in – or were sympathetic to – the anti-government demonstrations.

Overall passenger traffic fell 7.1% in September, the airline said, with inbound traffic into its Hong Kong hub plunging 38% for the second month running.

“September was another challenging month for our passenger business,” Cathay official Ronald Lam said.

“Our second-half financial results are expected to be below those of our first half,” he added, reversing the airline’s earlier predictions of a better end to the year.

Hong Kong has been battered by more than four months of sometimes violent unrest that have flattened the economy – forecasters say it will fall into recession in the third quarter – as tourist numbers sink.

The protests were sparked by a now-shelved bill to allow cases to be extradited to the mainland but have since morphed into a movement demanding greater democracy and police accountability.

Cathay stands as a glaring example of what happens to a company perceived by Beijing to be sympathetic or tolerant of the protests.

Beijing bites back

After its then chairman and CEO Rupert Hogg said he supported the right of his staff to hold diverse political views on the protests, Beijing hit back.

China’s aviation regulator banned airline staff who had supported the demonstrations from working on flights through its airspace and after state media encouraged a boycott in the crucial mainland market.

Cathay has since scrambled to repair the damage, issuing a series of statements condemning the protests as well as announcing the sudden departure of Hogg.

Employees say dozens of staff who expressed support for the protests have been sacked, accusing the company of carrying out a “Cultural Revolution” style purge.

The ongoing protests, in which violence between police and hardcore protesters has escalated on both sides, has undermined Hong Kong’s reputation for safety.

Lam said Cathay’s mainland market had been hit “especially hard” and the firm observed “very weak demand” during the “Golden Week” holiday in early October, usually a bumper period of travel for Chinese tourists.

Lam highlighted flights between India and North America as a bright spot for the company.


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