Hong Kong carrier Cathay Pacific warned staff on Monday that they could be fired for supporting "illegal protests", as the firm comes under pressure from Beijing over pro-democracy demonstrations.
The flagship carrier's stock plunged nearly five percent in Hong Kong trade on Monday after Beijing imposed new rules banning airline staff involved in the Hong Kong protests from flights to or over the mainland.
The airline was also forced to cancel dozens of flights Monday after authorities closed the airport in the afternoon when thousands of protesters flooded the facility.
Cathay has struggled to find middle ground in the increasing bitter standoff between protesters in Hong Kong and local authorities backed by Beijing.
On Monday, chief executive Rupert Hogg warned staff they could be fired if they participated in, or even supported, "illegal protests".
"Cathay Pacific Group has a zero tolerance approach to illegal activities," he wrote in a message sent to the company's employees.
"Specifically, in the current context, there will be disciplinary consequences for employees who support or participate in illegal protests," he added.
"These consequences could be serious and may include termination of employment."
- Boycott call on the mainland -
Cathay has come under fire from authorities and residents in mainland China who accuse it of allowing staff to participate in illegal activities.
It has also been the subject of a boycott call on social media, fuelled by articles from the powerful state media.
A #BoycottCathayPacific thread started on Weibo last week had attracted more than 33 million views and 13,000 comments by Monday.
Cathay has already suspended a pilot accused of rioting after allegedly participating in protests.
It said Saturday it had also fired two ground staff, without specifying why. Local media reported that they were accused of leaking the travel details of a Hong Kong police football team that was travelling to the mainland.
The airline is now subject to new regulations announced last week by Beijing's aviation regulator.
The rules require the airline to submit manifests of staff working on flights going to the mainland or through its airspace.
They ban any staff member accused of involvement in "illegal protests" from working on those flights, with authorities warning planes could be prevented from landing if they fail to comply.
Those rules came into effect from Sunday, and the regulator has also demanded Cathay submit a report before August 15 on planned measures to "strengthen internal control and improve flight safety and security".
- 'We must and will comply' -
Hogg said in an earlier message to staff that the airline was obliged to comply with the new regulations from the Civil Aviation Administration of China (CAAC).
"Cathay Pacific Group's operations in mainland China are key to our business," he wrote.
"We are therefore legally required to follow CAAC regulations and, as is the case with any notices issued by any regulatory authority having jurisdiction over us, we must and will comply."
Shares in the firm were down 4.85 percent to HK$9.80 on Monday afternoon, with the carrier's parent company, Swire Pacific, down 6.23 percent.
Cathay appears to have become a target of Beijing's ire in part because some of its crew joined protests, including at the airport.
Hogg specifically warned employees not to join actions being staged at the airport, where protesters gathered again Monday.
And he reminded staff that the "actions and words of our employees made outside of working hours can have a significant effect on the company".
The protests in Hong Kong were sparked by opposition to a bill allowing extradition to the mainland, but they have morphed into a broader movement seeking greater democratic freedoms in the city.
The demonstrations have been seen as the greatest threat to Beijing's rule of the semi-autonomous Chinese city since its handover from the British in 1997.