United States Threatens To Ban Cathay Pacific Flights

Filed Under: Cathay Pacific

Could Hong Kong’s strict (and arguably unfair) quarantine requirement lead to Cathay Pacific being banned from flying to the US? A new US Department of Transportation (DOT) filing suggests that this could be the case.

Hong Kong’s crew quarantine requirement

In February Hong Kong introduced a strict new quarantine requirement for airline crews. With this, pilots and flight attendants returning to Hong Kong are subjected to a 14-day quarantine in a hotel, plus seven days of medical surveillance thereafter.

Hong Kong has had a strict quarantine requirement for around a year now, but historically airline crews have been excluded from this. However, with some coronavirus cases being linked to airline crews, Hong Kong has added these new requirements, which have caused airlines to totally rework how they crew flights.

There are a few interesting exceptions, though. This quarantine requirement doesn’t apply to crews that just work direct turnarounds, as well as crews operating flights to mainland China, Taiwan, or Anchorage. The Anchorage exception may seem random, but conveniently Cathay Pacific has a major cargo hub there.

Cathay Pacific Cargo has a major hub in Anchorage

FedEx isn’t happy with Hong Kong

FedEx got the US DOT involved in this situation. The cargo airline has historically had 180 pilots based in Hong Kong, who were essential to maintaining the carrier’s intra-Asia network. However, the quarantine requirement has made it impossible for the airline to maintain its Hong Kong crew base.

FedEx moved its Hong Kong-based crews to San Francisco in order to “maintain the viability of critical operations in its intra-Asia network,” but it’s noted that this arrangement is causing the airline to “incur significant operational costs and personal burden” on pilots.

FedEx is unhappy because Hong Kong unilaterally made an exception for Anchorage, which benefits Cathay Pacific. FedEx has sought to work with Hong Kong to establish an exception for intra-Asia service points, as it’s argued that “FedEx applies health and safety controls for its intra-Asia operations commensurate to those required for Anchorage.”

FedEx has relocated its Hong Kong pilots to San Francisco

Cathay Pacific could be banned from the US

This is where the situation gets fun. The US DOT has indirectly threatened to ban Cathay Pacific. Here’s what this boils down to:

  • The bilateral agreement between the US and Hong Kong calls for “fair and equal opportunity for the designated airlines of each Contracting Party to compete with the designated airlines of the other Contracting Party”
  • It’s argued that Hong Kong is providing preferential treatment to Cathay Pacific, given the unilateral and arbitrary decision to make an exception for Anchorage
  • The DOT has tried contacting Hong Kong authorities to address this, but a January 28 letter went unanswered until March 1; even then, authorities in Hong Kong only promised to consider other exceptions, with no timeline provided
  • The DOT has decided that “this imbalance denies US carriers their bilateral right to a fair and equal opportunity to compete”
  • The DOT is now requesting that all Hong Kong airlines (primarily Cathay Pacific) file their schedules for US service within seven days, and then the US will decide if these schedules “may be contrary to applicable law or adversely affect the public interest”

Put more plainly, if Hong Kong doesn’t carve out exceptions for FedEx’s pilots, then you can expect that the US will stop Cathay Pacific from operating its schedule to the US.

Cathay Pacific now has to file its US schedule with the DOT

My take on this spat

I commend the DOT for flexing its muscles here, because the organization is spot on. Hong Kong arbitrarily carved out a quarantine exception for pilots flying to Anchorage, which benefits Cathay Pacific.

Meanwhile a US cargo airline has 180 pilots based in Hong Kong who exclusively operate intra-Asia flights, but they’re not getting equal exceptions. How do you justify allowing pilots to skip a quarantine if they’re coming from Anchorage, but not if they’re coming from Singapore, for example?

I’ll be curious to see if this suddenly makes Hong Kong reconsider its stance, or if we see Cathay Pacific banned from operating flights to the US. There is a certain irony to US authorities specifically standing up for Hong Kong-based employees here.

Also, while I do think that Cathay Pacific is getting preferential treatment here, the reality is that the airline hasn’t exactly otherwise been well protected by the government during the pandemic.

The quarantine rules do seem unfair towards FedEx

Bottom line

The US and Hong Kong are in a disagreement over their bilateral air services agreement. Hong Kong is requiring extended quarantines for Hong Kong-based crews, but it has carved out a special exception for Anchorage. That exception greatly helps Cathay Pacific, while FedEx has had to relocate its Hong Kong-based pilots due to this rule, given that they’d just perpetually be in quarantine.

What do you make of this situation?

Comments
  1. This is a major disruption for the US economy. Can FedEx find another base temporarily in Asia to circumvent the quarantine and still deliver cargo ?
    Post pandemic American still has JAL for OW in Asia so Cathay Pacific is disposable.

  2. excellent.
    Countries are free to lock down and not participate in the global economy or they can treat foreigners that engage in the same border crossings with respect.
    Subjecting foreign crew to concentration camp like quarantines is not how countries choose to participate in global aviation.
    As bad as it is for air service between the US and China, a stopover and crew change in Seoul for US carriers and roundtrip-crewed flights by Chinese carriers allows Chinese carriers to not have crews staying in the US (if I am correct).
    Australia chose not to participate in global aviation and US carriers are benefitting despite carrying virtually no passengers.

    This is just another indication that E. Asia will be much slower to respond. Most E. Asian countries are well behind the US and the UK in buying and delivering vaccines despite having much, much lower case and death counts. Given that E. Asia has had much worse disease outbreaks in the past, it is hard to understand why they are so unable to get out of this mess.

    Delta and United’s CEOs both said this week that they expect to be much stronger compared to other global airlines coming out of this.

  3. The shift in trade policy stance by America reminds me of a quote from the 1998 film Ronin: “Everybody’s your brother until the rent comes due.”

  4. International travel and commerce primarily functions on the basis of reciprocity. Hong Kong is clearly at fault here, and kudos to DOT for making an appropriate intervention to protect US and foreign interests.

  5. This is purely political.

    CX is already suffering with over 2B in losses. The CCP ain’t helping as the borders are still closed between HK and Mainland. Yet here in HK we are facing a 5th wave so it looks like we are most likely closing down again.

  6. Wake up call for FedEx. HKG post Covid will not be like HKG before Covid. China has certainly taken the ‘every cloud has a silver lining’ angle to covid to bring HKG under heel.
    Might be time for FedEx and others to reconsider where to locate their long term Asia base as its easy to see a world where geo-political squabbles are more common

  7. Paging Guam. Why doesn’t the US take advantage of its island territory in the Pacific? It should be a hub for US cargo airlines and even intra-Asia commercial flights like Narita used to be. Short of Guam, there’s also Singapore, Kuala Lumpur or Manila.

  8. Flying CX ORD-HKG-JHB in late July; great deal at 85,000 Asia Miles; hope this is resolved by that time!

  9. FNT… Go check out flightaware for Guam. United has turned Guam into its Asia hub for damn near everything. MX and Cargo flights all flow through Guam. Narita still sees a good amount of this action to but Guam has been huge for us.

  10. As an American based in HK and someone quite familiar with FedEx’s APAC operations, FedEx’s intra-Asia base is not Hong Kong, it’s Guangzhou, China. FedEx provides lucrative housing allowances to their Guangzhou based pilots that allow them to live in HK and commute across the border. The issue Lucky describes extends beyond HK’s borders.
    Also, as someone who is planning to fly CX to the States in a few weeks, if the US DOT causes cancellations, I literally have no way else to get back to the US (except maybe QR). This would be bad news for Americans living in HK as no other carriers are operating between HK and the US at the moment. United and American suspended their HK passenger routes early in the pandemic (way before crew quarantine). The reason they are not operating now is not because of quarantine limitations but rather there is no demand.

  11. A hub in HKG has a lot of sense for FedEx because a lot of cargo originates from around there. Also, excellent aircraft maintenance facilities. Perhaps, they can move to SGN where labor would be even cheaper.

  12. Anchorage airport is also a major FedEx hub. I’d argue that FedEx uses Guangzhou airport more for its intra-Asia network than it does for HKG airport.

  13. Why is no one mentioning the fact that FedEx flight crews flouted COVID restrictions in HKG, and likely spread the virus?

  14. You can’t move HKG. It’s one of the biggest (maybe biggest) cargo ports in the world. If you have even driven by the air and sea ports in HKG, they are so big as to seem unreal. It makes places like the Fedex Memphis hub and the Port of LA look tiny.

    Get the darn needle in everyone’s arm and lets get back to work.

  15. The Anchorage exception only applies to ANC laid over crews in a so-called closed loop pattern – basically that they have been in hotel segregation away from the local community. It’s not just an arbitrary case of that those coming from Anchorage don’t have to quarantine at all. There’s nothing stopping FedEx from implementing a similar closed loop arrangement in SFO and applying for an exemption from the Hong Kong government, but as of yet no evidence that they have done so.

  16. I’m with Peter. Let’s get this resolved before my July 7th JFK-HKG-LHR In First Class 😉

  17. What Can I say! Many ugly Americans are always ugly Americans, selfish and arrogant, you messed up your own country this is your own problem. Now you are going to spread the virus to other countries and people are trying to stop you doing so and you are complaining. Go ahead and messed up your own country by lifting mask wearing policy like texas and other states but stop and please stop spreading virus all over the world.

  18. You do realise HK Government has effectively crimped its own carriers by forcing them into 35 day closed loop? US carriers can operate here on double crews to avoid the closed loop rule while CX cannot.

    The ANC exception just relaxes some of the disadvantages HK Government imposed on its own carrier that US carriers have always enjoyed.

    I do think the closed loop rule is overkill. But there is no case for a US carrier operating intra-Asia to be treated any different from a HK carrier operating intra-Asia.

  19. HK authorities has excluded cargo flights. So Fedex is not affected at all!
    (follow Obet, the CX pilot, and you will find out more. He has been going home every day despite flying intra-asia/North America cargo flights on a regular basis.)

    The rule only applies to passenger flights inbound to Hong Kong.

  20. Let’s not forget that CX’s inter Asia services from HK are just as disrupted as FedEx’s by these rules… CX cargo runs everything through their HK hub, even on the flights from Anchorage.

  21. Ben you made Bill Mahars point this week. Do you know why the US HAS MORE covid cases in a day than China ever had? China cared about the virus while the us allowed the exceptions to swallow the rules. Good job hong Kong.

  22. I can’t comment on cargo flights, but if they ban Cathay’s passenger service it will be a great disservice to Americans who wish to fly with an airline that treats passengers right. Cathay’s service is light-years ahead of the sorry criminal organizations that pass for airlines here in the US.

  23. 30 comments and nothing on. A little context. HK is China in all but name. CCP has reneged or manipulated every foreign trade deal it has signed, without exception. Why should anyone believe the puppets in HK aren’t doing the same. HK elite need to wake up. Play by CCP dictates and there is no reason for the city state to exist. Does anyone believe pilots in HK actually still have free speech or other western style personal rights? Fedex should move pilots to Guangzhou. Why negotiate with stepchild? Better to have a seat at adult table and learn to play by house rules. Ban CX and move on…

  24. My money doesn’t fly into or out of Hong Kong anymore! And yes, I agree that this is very political.

  25. China has a long history of unfair trade policies. This should not surprise anyone.
    Cathay’s practice of using pilots, and other employees, back to back on transpacific flights without breaks substationally increases the risk of accidents.

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