Hong Kong, China – For decades, Hong Kong's Cathay Pacific Airways (CPA) was a proud symbol of the city's international status and an exemplary example of Asian aviation.
These days, the flagship carrier is treated like an enemy of the Chinese-ruled financial hub, regularly facing severe scrutiny and criticism from its own government as it struggles to recover from the fallout of the COVID-19 pandemic.
After Cathay cancelled more than 700 scheduled flights between December and February, Hong Kong Chief Executive John Lee Ka-chiu told local reporters he was “very worried” and wanted local aviation to “swiftly rebuild its capacity”.
Following criticism from the Transport and Logistics Bureau in March, Cathay CEO Ronald Lam Siu-por faced public questioning in the Legislative Council, where lawmakers criticised the airline's “chaotic management”.
The following month the pro-Beijing South China Morning Post newspaper published an article headlined: “Will Cathay Pacific recover, or is it time for Hong Kong authorities to take a stake in the airline?”
The Hong Kong government has so far rejected calls to take a stake in Cathay to ensure the semi-autonomous territory’s status as an aviation hub, a scenario envisaged in Beijing’s 14th Five-Year National Plan – practically a sacred text in Hong Kong business circles amid the growing influence of the Chinese mainland.
“The government has no intention of becoming a long-term shareholder of CPA,” a Transport and Logistics Bureau spokesman told Al Jazeera.
Most observers agree with the Hong Kong Aviation Officers Association’s (HKAOA) assessment that a shortage of pilots is the root cause of Cathay’s troubles – a result of Hong Kong imposing some of the world’s longest-running and most stringent travel restrictions during the pandemic.
In January 2020, Hong Kong International Airport (HKIA) recorded over 5.7 million passenger movements.
By April, the figure had fallen to just 31,739 — about 0.55 percent of pre-pandemic levels.
Despite its heavy reliance on international travel and trade, Hong Kong was one of the last jurisdictions to reopen to the world, fully lifting restrictions only in early 2023.
According to the HKAOA, Cathay's management laid off 1,000 pilots in 2020 and another 1,000 pilots resigned over the next few years.
Many of the pilots who quit cited the stress of adhering to Hong Kong’s ultra-strict quarantine rules, which forced the airline to operate “closed loop” flights where crews had to isolate for five weeks in a hotel followed by two weeks at home.
Cathay has said it has more than 2,900 pilots, including at its subsidiary budget carrier Hong Kong Express, but needs 3,400 to restore pre-pandemic capacity.
It has announced “robust plans” to hire another 500 pilots.
Some observers have said that criticism of the government is particularly unfair, since its harsh restrictions were the cause of many of Cathay's difficulties.
“Cathay is still one of the best-performing airlines in the world, with financial performance better than the top three Chinese airlines – and recording a profit of nearly HK$10 billion,” Zheng Lei, chairman of the aviation department at Swinburne University, told Al Jazeera.
In March Cathay reported its first annual profit in four years at 9.78 billion Hong Kong dollars ($1.25 billion).
“We have achieved our group target of achieving 70 per cent of passenger flights by the end of 2023, equivalent to pre-pandemic levels, as set just 12 months after Hong Kong reopened. We will reach 80 per cent this quarter, and we are working towards reaching 100 per cent in the first quarter of 2025,” a Cathay Pacific spokesperson told Al Jazeera.
“This city has been our home for more than 77 years, and we represent Hong Kong on the global stage as its homegrown carrier,” the spokesperson said.
Although these encouraging results prompted CEO Ronald Lam to declare that “Cathay is back”, few in government circles appear to be celebrating the return of their flag-carrying company.
“Some of the government's criticism regarding flight cancellations, service and disorganised management may be justified – these issues need to be addressed. But Cathay has done a lot to improve the situation, and they are actively recruiting pilots from China,” Lei said, adding that it is much easier to improve customer service than to turn around a loss-making airline.
Cathay received significant financial support from the government during the pandemic, which critics argue imposed a moral obligation on the airline to maintain its standards and human resources.
“For me, the main thing is that the Hong Kong government should have taken steps to support Cathay Pacific to preserve the Hong Kong aviation sector – and that didn't happen,” HKAOA president Paul Wetherillat told Al Jazeera.
Lei agreed, saying mainland China's top airlines have done a better job at retaining employees.
In June 2020, the government provided Cathay with a bridge loan of HK$7.8 billion ($998 million) and bought shares with detachable warrants worth HK$19.5 billion ($2.49 billion).
Cathay redeemed half of the government-held preference shares due in December 2023 and the debt option was never exercised.
Weatherilt said Cathay took advantage of the pandemic to permanently furlough staff, cut wages and make workers' conditions worse.
“Of course, China was slow to recover from the pandemic, but almost every other airline made temporary cuts and tried to retain key skills and assets,” Wetherillt said.
“Cathay has left Hong Kong aviation in a pitiable state.”
The Hong Kong government has said that while it offered financial assistance, it had specifically requested Cathay to “fully consider the potential impact on Hong Kong's status as an international aviation hub and Hong Kong's aviation network”.
Weatherilt said the government's stance leaves the airline in a vulnerable position.
“Swire should be very worried, because this is a sad development – the company that controls Hong Kong Aviation is ultimately run by a London company,” Weatherilt said, referring to John Swire & Sons Ltd.
As China tightens its control over Hong Kong, the politics and colonial baggage stemming from Britain’s former administration of the territory is increasingly bubbling beneath the surface in trade.
Cathay has been a target of Beijing since massive pro-democracy protests broke out in 2019.
Cathay's British chief executive Rupert Hogg and chief customer and commercial officer Paul Lu resigned in August that year after pressure from Chinese authorities to crack down on staff supporting the protests.
In addition, pilots of Cathay aircraft landing at airports in mainland China were also required to undergo rigorous new ground checks.
Chongxian Ma, deputy secretary of Air China's Communist Party Committee, was made a non-executive director of the company in June 2021. Two more Communist Party non-executive directors were added to the board in May 2022 and July 2023.
In May last year, Cathay publicly apologised after a recording of a flight attendant mocking a passenger who did not speak English was shared on social media.
When Bloomberg reported earlier this year that Beijing-based Air China was considering raising its 29.99 percent stake in Cathay, some observers saw it as part of China’s patriotic drive to gain a stronger grip on Hong Kong’s flagship airline.
However, an industry insider who asked not to be named told Al Jazeera the move was likely based on financial logic, as Air China relies on its stake in Cathay to offset its financial losses.
While removing Cathay as Hong Kong's flag carrier and replacing it with a Chinese-owned operator may please some nationalist elements, there is no dispute that there are no credible alternatives to Cathay, at least not in the short or medium term.
“It will not be easy for the government to develop the airline as an alternative flag carrier – it is not viable and not a good idea,” Lei said.
Some observers believe British-owned Cathay Pacific presents a convenient target for politicians seeking to boost their patriotic credentials, especially as criticism of the government has become highly sensitive and potentially illegal under a Beijing-drafted national security law passed in 2020.
On Wednesday, Hong Kong lawmaker Jeffrey Lam Kin-fung told local media that Cathay should launch direct passenger services to eight smaller Chinese mainland cities recently selected by Beijing to ease travel restrictions to Hong Kong.
Lam said this would “take full advantage of Beijing's goodwill measures”.
Of course, political interference is a growing concern.
Publicly criticising Cathay could backfire on Hong Kong as it struggles to reestablish itself as a vibrant city, financial centre, tourist hub and business gateway to China.
In contrast to Hong Kong's stance towards Cathay, the Dubai government did not attack Emirates Airways when severe floods in the UAE in April left thousands of passengers stranded.
“Cathay would never complain publicly, but they have good reason to be unhappy,” an industry source who works closely with Cathay management told Al Jazeera on condition of anonymity.
While local rival Singapore reported a return to pre-pandemic passenger activity in February this year, Hong Kong still lags behind.
Passenger traffic at Hong Kong International Airport in March 2024 was 4.35 million – roughly two-thirds of the figure for the same month in 2019.
“There must be collective responsibility for the loss of interest in Hong Kong, which partly arose from the 2019 protests – which greatly damaged the SAR’s reputation as an aviation, financial and tourist destination – as well as the stringent measures imposed during Covid,” Shukor Yusof of Endau Analytics told Al Jazeera.
Hong Kong's image has also been tarnished by negative media coverage of the crackdown on dissent, including the high-profile prosecution of former media baron Jimmy Lai.
As both Hong Kong and Cathay seek to rebuild, it is certain that their fates are inextricably intertwined.
Lei said, “If the government wants to develop Hong Kong as a finance hub and if Hong Kong is to return as a hub of global aviation, then Cathay Pacific Airways should be given more support rather than criticism.”