No flying the coop for Cathay in China

It can be difficult doing China business in these troubled political times, regardless of product or services. Italian luxury brand Versace had to apologize after its newly-signed brand ambassador in the mainland quit in wake of criticisms that a T-shirt released recently identified Hong Kong and...

Mary Ma

Monday, August 12, 2019

It can be difficult doing China business in these troubled political times, regardless of product or services.

Italian luxury brand Versace had to apologize after its newly-signed brand ambassador in the mainland quit in wake of criticisms that a T-shirt released recently identified Hong Kong and Macau as countries.

Cathay Pacific Airways is encountering greater turbulence after China's Civil Aviation Administration imposed new rules to ban flight crew members from working on flights to the mainland, or through its airspace, if they've supported anti-government protests in Hong Kong.

The rules are harsh. First, starting this past Saturday, all Cathay pilots and flight attendants who joined or supported illegal protests are prohibited from flying to or through the mainland.

Second, beginning yesterday, identification information of Cathay flight crews had to be submitted to the mainland in advance for approval.

Third, by Thursday, the airline must give the regulator a plan on how it's going to beef up internal controls, flight safety and security.

The regulator cited potential safety risks for the rules, which is ludicrous since Cathay is considered one of the world's safest airlines. It's all about retaliation.

Immediately, the curbs are aimed at Cathay's rank and file, who are said to be mostly sympathetic to protesters, with many of them participating in a sit-in protest, forcing numerous flights to be cancelled.

Following the ban, Cathay also confirmed it has grounded a pilot who's facing riot charges, and sacked two ground staff for undisclosed misconduct. Meanwhile, a woman detained on Saturday was a former flight attendant.

It has always been Beijing's contention that the protests are being instigated by "foreign forces," although little evidence has been produced to back the claim. Cathay is Hong Kong-based, but conventionally regarded as British.

In sanctioning an airline of British interest, Beijing is also giving out a warning other foreign companies and their governments. Before the mainland's announcement, British Foreign Secretary Dominic Raab called Chief Executive Carrie Lam Cheng Yuet-ngor to discuss the protests - a move that angered Beijing.

As for Cathay chairman John Slosar, the airline is wedged deeply between a rock and a hard place - it's probably the company's biggest crisis so far.

Since the mainland is an indispensable market, Cathay has no choice but to comply with the new rules. Even then, many questions remain unanswered.

Will the carrier be able to operate when many of its staff face censorship?

What is it going to do with the staff censored by the mainland - redeploy them to other positions, or terminate their contracts to bring in people endorsed by Beijing?

How will the company's powerful trade unions react? Will pilots and flight attendants take industrial action?

As Beijing demanded Cathay submit crew information for advance vetting, it's plausible the central government has established a blacklist against which such information will be checked.

It can be a life-or-death situation for Cathay, since Hong Kong's airspace is so surrounded that it's virtually impossible for flights - including those to Europe, the United States and Canada - to operate without flying through Chinese airspace.

The SAR's de facto flag carrier is totally on its knees.