Hong Kong’s airlines dealt another shock by new restrictions

While all airlines around the globe are struggling to survive the COVID-19 crisis, those in Hong Kong are particularly hard-hit. The pandemic and its resulting border closures represent a perfect storm for airlines with no domestic market and heavy reliance on international connecting travel.

The dominant airline, Cathay Pacific, has been struggling to gain demand momentum, and now the slight progress it has made is being threatened by strict crew quarantine rules that reduce operational flexibility and have forced the airline to suspend more routes.

The local industry has undergone consolidation in recent years, with Cathay taking over the local LCC Hong Kong Express and subsequently shutting down its Dragon subsidiary. Its only real locally based rival, Hong Kong Airlines, was already in rebuilding mode before the pandemic struck. Now HKA's future is under another cloud due to the bankruptcy restructuring of its major owner, HNA Group.

The weakened state of Hong Kong's airline industry also presents opportunity, however. Newcomer Greater Bay Airlines aims to launch services from Hong Kong, one of the few start-ups expected to emerge globally this year.