The US Department of Transportation (DoT) has issued an order to all Hong Kong-based airlines to file schedules for all flights to and from the United States to address what it deemed as a competitive disadvantage to American carriers due to the stiff quarantine rules in the major Asian hub.
As of February 20, quarantines rules in Hong Kong requires all local-based aircrew to quarantine for up to 21 days when returning from an international flight — with the exception of services from Anchorage, where Cathay Pacific operates a significant transhipment operation — triggering a complaint from FedEx and a subsequent action from the US DoT.
The DOT said this exception benefitted Cathay Pacific. Meanwhile, in its complaint, FedEx said it has approximately 180 crew members based in Hong Kong and that the new requirement would make it impossible for them to be able to maintain their crew base in the financial hub, which it said serves as a “critical hub in its intra-Asia network”.
“Hong Kong carrier Cathay Pacific operates a large transhipment operation at Anchorage; it conducts multiple daily all-cargo operations between Hong Kong and Anchorage that connect to other Cathay flights between Anchorage and points throughout the continental US,” the DoT said.
“This carve-out effectively provides Cathay Pacific with the ability to continue those operations without impact from the new crew quarantine requirements. Meanwhile, FedEx’s Hong Kong-based crews serve only intra-Asia routings and therefore do not benefit from the Anchorage exception.”
In response, the US DoT then issued the order this week to Cathay Pacific Airways, Hong Kong Airlines and Hong Kong Express Airways giving them until 23 March to file their flight schedules for all US service for the department to be able to review and verify whether “the operation of the services contained in those schedules, or any part thereof may be contrary to applicable law or adversely affect the public interest”.
Consequently, they will have to file all schedules for future, new or resumed routes at least 30 days before the service.
Currently, the order only applies to Cathay Pacific — the only Hong Kong-based carrier serving the US.
"The manner in which Hong Kong has imposed its restrictions disproportionally impacts US carriers to the exclusive benefit of Hong Kong carriers, and this imbalance denies US carriers their bilateral right to a fair and equal opportunity to compete in the US-Hong Kong market," the DoT added.
Normally, carriers authorised to operate in the United States do not need to seek prior approval for their schedules.
Cathay Pacific told FlightGlobal that it will “continue to comply with all the applicable aviation regulations in both Hong Kong and the territories to which we fly.”
Earlier, the Hong Kong flag carrier also cited a "significant impact" of the new quarantine guidelines on its operations — since most of its cabin crew are based in the city.
Cathay Pacific said in January that the rules may result in a 60% reduction in passenger capacity and another 25% reduction in its cargo capacity at that time. The carrier also said the crew quarantine would entail an estimated HK300 million (US$39 million) to HK400 million (US$52 million) per month on top of its current monthly cash burn of between HK$1 billion (US$129 million) to HK$1.5 billion (US$193 million).
Due to the quarantine rules, Cathay also noted a reduction in cargo flights to the US from the usual 35-39 weekly flights to 21-28 flights.
Meanwhile, ahead of the tighter quarantine rules for aircrew, FedEx has relocated all of its Hong Kong-based staff to San Francisco, in a move that would both burden its local staff and incur additional costs to the company.
