Cathay says it can only increase flights to one-third of pre-Covid levels by the end of the year
Hong Kong is set to scrap hotel quarantine today (Friday, September 23), but travellers looking to leave the city after two-and-a-half years of Covid isolation face the prospect of paying sky-high airfares.
Weeks after Cathay Pacific Airways Ltd., a major victim of the city's strict pandemic strategy pleaded publicly for a roadmap to exit Covid, the Asian financial hub's about-turn on hotel quarantine is set to leave airlines scrambling to fill a yawning gap in reduced flight schedules.
Hong Kong Chief Executive John Lee will announce an end to hotel quarantine at a press conference Friday afternoon, Bloomberg News reports.
The government will end mandatory hotel quarantine and a requirement that new arrivals get a negative PCR test before boarding a plane.
Cathay, Hong Kong's biggest airline, which supplies about 45pc of all plane seats in and out of the city, warned it could only increase flights to one-third of pre-Covid levels by the end of the year, pegged back by a lack of aircraft and the need to train new pilots and staff. Foreign carriers have gutted schedules or walked away altogether.
In the first eight months of this year, Hong Kong International Airport handled just 3.4pc of passengers and 30pc of flights compared to pre-Covid times.
Travellers face paying significantly higher prices for available tickets. They will need to stump up HK$102,000 (€13,200) for a return business-class flight to Los Angeles early next month, more than double the usual fare.
A return economy-class seat to London departing on October 3 will cost HK$25,600 (€3,314), as much as triple regular prices, according to Google Flights.
"Demand and supply face a huge imbalance, but once we know there is a clear timeline and a roadmap, airlines will assess their own decisions and commercial judgments," said Yolanda Yu, vice-chair of the Board of Airline Representatives of Hong Kong, which represents more than 70 carriers flying in and out of the city.
Yu said the quarantine reduction was good news, but added: "Whether Hong Kong is viable to increase capacity is yet to be seen." Typically it takes airlines six to nine months to organise flight schedules, Yu said.
Bloomberg Intelligence analysts Tim Bacchus and Eric Zhu said despite Cathay's problems, it still had some room to revise passenger capacity to 40pc.
"Demand rebound will likely be led by departures of travel-starved residents," the pair said in a September 20 note.
Foreign airlines face the challenge of airport restrictions and a shortage of aircraft and staff in restarting Hong Kong flights.
Carriers could be reluctant to restart services when other parts of the world are more profitable. And operationally, airlines particularly flying between Europe and Asia face longer routing with Russian airspace closed to most carriers.
British Airways plans to resume flights to Hong Kong in December, but Australia's Qantas recently pushed back the restart of Hong Kong flights until late January 2023. Virgin Atlantic Airways Ltd. isn't set to return until March next year.
United Airlines, the only US carrier with Hong Kong flights, is yet to decide on resuming services. Japan’s ANA said earlier this week it would restart services to the city from Tokyo Haneda airport from the end of October, flying four times a week.
ANA also plans to increase international flights and cabin staff numbers to meet an anticipated jump in demand when Japan abolishes Covid border controls next month.
Corporate travel manager CWT said the amount companies are set to pay for flights out of Hong Kong will continue to rise next year. From pre-pandemic levels to next year, airfares will have risen 53pc.
Meanwhile, Thailand will end a nationwide state of emergency declared in the wake of Covid outbreak after downgrading the virus from a "dangerous" communicable disease to one that only requires surveillance.
The Center for Covid-19 Situation Administration on Friday agreed to let a state decree enforcing the emergency to expire on September 30, Deputy Health Minister Sathit Pitutecha told reporters.