Hong Kong’s Cathay Pacific under pressure from lawmakers and tourism sector to offer discounts, deals after posting hefty profit

He was referring to the government’s multibillion-dollar bailout plan to help keep the company afloat in 2020 during the Covid pandemic, which hit global travel hard.

“Now that the firm is making massive profits, shouldn’t Hong Kong residents be given some concessions such as in the form of ticket discounts or rebates, as they really had a hard time during Covid-19?” he said. “It should give back to the community.”

Hong Kong government hits out at Cathay over 786 flight cancellations in 2 months

Preference shares worth HK$19.5 billion were issued to the government as part of the recapitalisation deal agreed during the pandemic. In December last year, Cathay bought back half of the shares for HK$9.75 billion, saying it planned to purchase the remainder by the end of July.

Cathay last week said it had learned a lesson from recent flight cancellations, pushing back its target for restoring pre-pandemic capacity to early 2025.

But customers have grumbled about fare prices, pointing to the string of recent flight cuts around peak holiday periods as a sign of declining service quality.

Cathay cancelled 786 flights between last December and February, amounting to more than 4 per cent of total operations.

The company attributed the cuts to factors such as internal planning failures and an underestimation of pilot reserve levels, promising to prevent disruptions during the Easter holiday amid government criticism.

The city’s tourism sector recovered more slowly than the government expected in 2023, with flight capacity limitations a factor.

Tourism legislator Perry Yiu Pak-leung urged the flag carrier to offer more deals to travel agents such as promotional airfare packages via partnerships with hotels.

“We hope the airline can provide more perks and promotions for travel agents to facilitate the tourism industry’s recovery,” he said. “Cathay should undertake the mission of collaborating with travel agents and hotels to roll out promotional packages or group tickets to attract inbound overseas travellers to Hong Kong.”

Tourism Association executive director Timothy Chui Ting-pong agreed, saying the move could help travel agents attract group tours, while also benefiting Hongkongers leaving the city for holidays.

“This could help boost the business of travel agents as part of the recovery of the tourism industry,” he said.

“But the most important thing is for Cathay to restore the flight capacity by hiring sufficient aircrew in a bid to consolidate the aviation industry’s reputation.”

Law Cheung-kwok, senior adviser for the Aviation Research and Policy Centre at the Chinese University of Hong Kong, said Cathay should lower its airfare as its ticket prices had been a bit expensive compared with those of other airlines.

Hong Kong’s Cathay ‘learns lesson’, pushes back capacity target by 3 months

“One of the reasons behind Cathay’s massive profits is its expensive airfares. Therefore Hongkongers and visitors expect that its ticket prices will go down to a reasonable level,” he said.

“Cheaper airfare could be affordable for more visitors and would help revive the city’s aviation industry. With hefty profits last year, there is room for Cathay to lower its ticket prices.”

But Exco convenor Regina Ip Lau Suk-yee argued that Cathay should fulfil its social responsibility by recovering at a faster pace rather than handing out discounts.

“Cathay has other ways to fulfil its social responsibility. Recovery of our aviation sector hinges on both the Airport Authority and Cathay resolving its manpower shortage problem,” she said.

“The government has a responsibility to cure its deficits and should not rely on ‘sweeteners’ from a private corporation to keep people happy. Over-reliance on sweeteners to placate the public undermines the government’s commitment to fiscal prudence.”

Election Committee lawmaker Andrew Lam Siu-lo also said the best way for the company to give back to the community was to strengthen its competitiveness by improving in areas such as flight capacity and staff numbers.

“The primary responsibility of Cathay is to rebuild the aviation industry’s reputation by improving its service quality,” he said.

Airfare promotions were simply “gimmicks”, Lam said, adding it was more important for the airline to recapture its “glory”.