Omicron: Cathay Pacific at 2% of 2019 passenger capacity


The Asia-Pacific travel industry’s hopes for a much brighter 2022 have taken an early hit, with some major markets tightening travel restrictions due to the continued spread of the omicron variant of COVID-19.

Several countries in the region have reimposed restrictions on international arrivals or have suspended newly introduced border relaxations. And in other cases, governments have delayed long-awaited plans to reopen for international travel.

These moves will hurt fourth-quarter 2021 and first-quarter 2022 results for airlines heavily exposed to these markets. India, Thailand and New Zealand are examples of Asia-Pacific countries that have that postponed plans to ease international border restrictions significantly due to omicron.

But as always – airlines such as Cathay Pacific and Singapore Airlines that do not have domestic networks are likely to be affected the most.


  • Hong Kong has temporarily suspended flights from eight markets.
  • Cathay Pacific plans to cut its capacity to 2% of pre-COVID levels.
  • New crew quarantine rules are also complicating operations.
  • Singapore has paused VTL (vaccinated travel lane) ticket sales, with quota cut to follow.
  • SIA’s strengthening recovery could be affected by the latest measures.

Cathay has slashed its already anaemic passenger capacity

Cathay Pacific has been particularly hard hit. The airline has dramatically cut back its planned capacity in response to the latest crew quarantine requirements and flight restrictions imposed by the Hong Kong government.

The airline forecasts that it will operate just 2% of its pre-pandemic passenger capacity in Jan-2022 and 20% of its cargo capacity. In comparison, it operated 12% of its pre-COVID passenger capacity in Nov-2021 and Dec-2021, and 71% of its cargo capacity in Nov-2021.

Cathay said it will “operate as many cargo services as possible [in January] while complying with the latest COVID-19 regulations”. The airline will also “strive to maintain passenger connectivity with key destinations, although at reduced frequencies”.

On 5-Jan-2022 the Hong Kong government announced that it would suspend flights from eight countries due to concerns about the spread of the Omicron variant of COVID-19. The suspensions will be in force for 14 days from 8-Jan-2022, affecting services from Australia, Canada, France, India, Pakistan, the Philippines, the UK and the US.

The government said it will “review in due course” whether to lift the suspensions after 14 days or continue them.

Hong Kong authorities had previously been imposing two-week route suspensions for airlines if flights were deemed to have brought in too many positive COVID-19 cases. However, these have been airline- and route-specific, so the eight-country suspension is a far more sweeping step.

On the operational side, increasing restrictions are also causing staffing and crew scheduling headaches.

Cathay Pacific said on 30-Dec-2021 that tighter quarantine rules for aircrew were constraining its ability to operate flights. This caused it to change its schedule and cancel some planned passenger flights, with these changes expected to extend through the first quarter.

Hong Kong’s quarantine requirements are some of the toughest in the region

Even before the flight suspensions, Hong Kong had relatively strict quarantine provisions in place. The majority of countries – about 140 – are already rated by Hong Kong as category A on its risk assessment list.

Most non-residents are not allowed to enter from the Category A countries, while vaccinated Hong Kong residents have to quarantine after arriving. This means the latest route suspensions will essentially affect returning Hong Kong residents the most.

Mainland China is in a separate category. Travelers from the mainland – whether or not they are Hong Kong residents – have a significantly reduced quarantine requirement.

New restrictions will cause Cathay capacity to sink even lower

The graph below shows that Cathay has not been able to make much progress in restoring international services.

The latest restrictions have caused a noticeable dip in Jan-2022 – and there will be more reductions that are not yet reflected on this chart.

Cathay Pacific capacity, stacked by region, as measured in weekly seats to Jan-2022

Looking at only the past 12 months gives better definition of the trends occurring within the low capacity levels.

The dive in seat numbers in early Jan-2022 has brought capacity back to levels last seen in May-2021, and will likely go lower still.

Cathay Pacific capacity for 12 months through 10-Jan-2022, stacked by region, as measured in weekly seats, to Jan-2022

Singapore’s VTL flights are restricted – but not halted

Singapore is one of the countries that has put a temporary brake on its border reopening initiatives due to the Omicron threat. This is particularly notable since the Singapore government was previously one of the most active in easing border restrictions. It has opened vaccinated travel lanes (VTLs) between Singapore and 27 other countries to allow quarantine-free arrivals, with testing protocols.

However, on 22-Dec-2021 the Civil Aviation Authority of Singapore (CAAS) directed that new ticket sales be suspended for all VTL flights scheduled to arrive before midnight on 20-Jan-2022. Travel will be allowed for tickets already purchased. Ticket sales are continuing for VTL flights scheduled after 20-Jan-2022, although ticket quotas will be capped at half the previous levels from that date. 

The scheduled launch of VTLs with three countries has also been postponed – Qatar, Saudi Arabia and the United Arab Emirates.

Omicron restrictions will be a setback in SIA’s impressive recovery

These measures are obviously a significant blow for Singapore Airlines (SIA). The airline had been ramping up its VTL flights in Nov-2021 and Dec-2021, with more increases planned in Jan-2022. The airline had estimated that its passenger capacity would return to 45% of pre-COVID levels in Dec-2021, and 47% in Jan-2021. But these targets could be at risk due to the Omicron measures.

As the graph below shows, SIA has had more success than Cathay in rebuilding international services during the pandemic. It also may not be as badly affected by the Omicron restrictions, as its VTL flights are still operating despite the ticket sale limitations.

Singapore Airlines capacity, as measured in weekly seats, 2019 to Jan-2022

The VTL suspensions do, of course, affect some of Singapore’s and SIA’s most important markets.

CAAS (Civil Aviation Authority of Singapore) said the 27 VTL countries accounted for 60% of pre-pandemic arrivals at Singapore’s Changi airport. And the chart below shows that – as would be expected – the VTL countries include all but two (Japan and Vietnam) of SIA’s top 10 markets for the week of 3-Jan-2022.

SIA top 10 markets, as measured by weekly departing seats, for the week of 3-Jan-2022

A key factor for airlines will be the duration of the latest restrictions

So far, most of the new restrictions or reopening delays in the Asia-Pacific region are short term in nature as governments watch to see how severe the Omicron outbreak will be.

There are some grounds for optimism that this will just be a temporary setback in the broader industry recovery, although the coronavirus pandemic certainly has a track record of making a mockery of optimistic projections. Hong Kong’s latest route suspensions are currently only for a two-week period, and for Singapore the VTL ticket sale suspension applies through 20-Jan-2022.

The big question will be whether the restrictions are lifted as scheduled or extended further. In the longer term, the strict quarantine requirements for passengers and crew is probably a greater concern for Cathay Pacific. Only when these are relaxed can Cathay hope to have a similar recovery trajectory to SIA’s.

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