Hong Kong aviation: part one – recovery is picking up, but outlook still uncertain
Airlines are beginning to add back services to Hong Kong in response to easing of quarantine restrictions. Although the latest rule relaxation is a welcome development for the airline industry, it is still uncertain how extensive or rapid the capacity recovery will be in Hong Kong, and whether there has been any permanent damage to demand.
Hong Kong has been one of a handful of major Asia-Pacific markets that have been slow to remove COVID-19 entry restrictions. Cathay Pacific executives have made the argument that the recovery rate will be similar to that in other Asian markets, just starting later.
It is certainly true that Hong Kong has some underlying advantages as an aviation hub. However, some observers believe Hong Kong’s slow opening has put it at risk of suffering a structural reduction in demand. This is based on the fact that some connecting flows have switched to other Asian hubs while Hong Kong has been constrained – and may not switch back.
This is part one of a two-part report.
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