Cathay Pacific, icon of Hong Kong’s rise, now reflects China’s grip

Raymond Zhong and Tiffany May, The New York Times

Posted at Aug 12 2019 08:48 AM

Anti-extradition bill demonstrators hold a protest at the arrival hall of Hong Kong Airport, China Aug. 10, 2019. Issei Kato, Reuters

HONG KONG — Two months of boiling anti-government protests have divided Hong Kong’s people. Now, the unrest has pitted one of the territory’s best-known international brands against some of its own employees.

The Chinese government has forced Cathay Pacific Airways, a longtime emblem of Hong Kong’s proud status as a global capital, to bar staffers who support or participate in the territory’s protests from doing any work involving flights to mainland China. As part of the same demands, issued Friday, it ordered that the airline begin submitting information about all crew members flying to — or above — the mainland to the Chinese authorities for prior approval.

Cathay said separately Saturday that it had removed from flying duties a pilot who was charged with rioting in Hong Kong and that it had fired two airport ground staff for misconduct. Earlier in the week, the airline said it would investigate accusations that its employees had leaked travel information for a Hong Kong police soccer team.

The orders from mainland air safety officials represent an escalation into Hong Kong’s business affairs, illustrating the power Beijing wields over international companies that build their fortunes on access to China. Some in the semi-autonomous territory fear that China’s political encroachment also represents an economic threat, not only to Cathay, but also to all multinational companies in Hong Kong.

“If you’re a boss, you’re thinking, ‘Oh my God!’” said Carol Ng of the Hong Kong Cabin Crew Federation, a union that represents airline workers. “‘I just want to do business here. Now they’re screening my staff.’”

This kind of fear could do real damage to Hong Kong’s economy, Ng said, “much more than the protests or rallies themselves.”

Cathay representatives did not respond Sunday when asked how exactly the company planned to enforce the new orders from Beijing. China’s aviation regulator was not available for comment.

The airline’s largest shareholder is Swire Pacific, a Hong Kong-based conglomerate with British roots. Its second-largest owner is Air China, the state-run carrier.

Cathay’s predicament underlines the economic pressures coming to bear on Hong Kong. Forecasters predict that the long-running protests on top of the trade war between the United States and China will weigh on the territory’s growth. Tourist visits have declined, and the Hong Kong stock market has been falling for the past several weeks.

Several Cathay employees interviewed by The New York Times over the weekend said that the company had not asked workers about their involvement in or attitudes toward the demonstrations, something that it would presumably need to do to stop them from working on flights to mainland China.

Still, the employees described an atmosphere of rising fear and anger in response to China’s demands, and of unease about how Cathay would carry them out.

“We are all so furious now,” said Sally Chu, a 28-year-old Cathay flight attendant. “We wonder how they can check on our activities and ban us, too.”

The airline, one of Asia’s largest international carriers, has already blamed Hong Kong’s recent turmoil for a drop in bookings. The controversy now threatens to test the company’s commitments to its employees against its own bottom line, which depends significantly on its ability to fly through mainland Chinese airspace.

The pilot whom Cathay removed from service, Liu Chung-yin, was released on bail after his arrest late last month. But the Chinese state news media noted that he had been allowed to continue flying and warned that Cathay would “pay a painful price” for “tacitly encouraging anti-government strikes.” Liu could not be reached for comment.

Other Cathay employees’ political activities attracted attention in mainland China after large numbers of the airline’s workers called in sick to take part in a recent general strike, which led to scores of flight cancellations.

Announcing the pilot’s suspension Saturday, Cathay went out of its way to say that “we express no view whatsoever on the subject matter of any proceedings to which he may be subject.”

In a message to employees that day, Cathay’s chief executive, Rupert Hogg, said the airline planned to comply with the Chinese regulator’s new requirements. “Our primary focus must remain on delivering a safe, comfortable customer experience for everyone who chooses to fly with us,” Hogg wrote.

Just days earlier, the airline’s leaders had said employees’ political views were not their concern.

“We certainly wouldn’t dream of telling them what they have to think about something,” Cathay’s chairman, John Slosar, said at a news conference. “They’re all adults. They’re all service professionals. We respect them greatly.”

It is also unclear whether meeting the Chinese authorities’ demands will be enough to spare Cathay the wrath of Beijing’s propaganda machine. In a social media commentary Sunday evening, the People’s Daily, the Communist Party’s mouthpiece, said the airline’s actions had hardly resolved its “crisis.”

“Ground the flights that must be grounded, punish those who must be punished, rectify what must be rectified,” the commentary said. “In the face of such warnings, how can you joke around!”

Some Cathay workers said it might be for the best if they did not fly to the mainland after all, lest they risk being arrested or having their phones and other personal belongings searched.

“The airline must speak up and ensure the rights and personal safety of employees,” said another Cathay flight attendant, Karrie Chan, 24. “Otherwise, I would feel unsafe even when at work.”

Cathay rose to pre-eminence by connecting Asia’s emerging economies to London, Los Angeles, New York and other centers of wealth in the developed world. Hong Kong prospered by connecting China to the global companies that wanted to do business there.

Today, though, more of those companies operate in mainland China directly, with less need for Hong Kong as a bridge.

And Cathay is now just one of many carriers linking East and West. China’s state-backed airlines can fly international passengers directly to and from the mainland’s megacities. The flag carriers of the Persian Gulf nations offer their own convenient routes to Asia for travelers from Europe and North America.

Cathay Pacific’s history is tied up with its home city’s emergence as a global hub in ways that date back to the company’s founding, in 1946.

The airline’s founders, Roy Farrell and Sydney de Kantzow, were pilots who had flown missions across the Himalayas to supply Nationalist forces in China during World War II.

After the war ended, Farrell, a Texan, bought a surplus transport plane with the dream of flying goods to China from Australia, according to “Beyond Lion Rock,” a history of Cathay by the journalist Gavin Young.

The Roy Farrell Export-Import Co.’s inaugural voyage from Sydney carried “three and a half tons of clothes — for the tattered of China,” The Sydney Morning Herald reported.

Hong Kong at the time was in near ruin. Its harbor was cluttered with the wrecks of warships from the Japanese occupation, and air services were almost nonexistent. But as the British colony grew rich over the following decades, so did Cathay, transforming from a swashbuckling shoestring operation into a carrier of regional, then international, renown.

That the airline was British-controlled and flown largely by British and Australian pilots did not prevent it from becoming a source of pride for many people in Hong Kong — a respected global name associated with punctuality and good service.

The industry’s changing landscape began taking a toll on Cathay’s finances several years ago, and in 2017, the airline laid off hundreds of workers. It has since returned to profitability, although its image took another hit last year when it acknowledged that the personal data and travel histories of as many as 9.4 million people had been compromised in a computer breach.

Recently, Cathay bought Hong Kong Express, a low-cost airline, to help it better compete against budget upstarts in the region.

Cathay employees said over the weekend that they still trusted the company to treat its crew members fairly, and that concerns for their own jobs and safety were still outweighed by their desire to voice their convictions.

“The heavy-handed tactics of mainland China only make me feel that I must speak out so that they know how much we value freedom and democracy,” said Chu, the flight attendant. “Otherwise, they will only get worse.”


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