US DOT puts the squeeze on Hong Kong

The US Department of Transportation will require Hong Kong-based airlines to file their planned operations in advance, a first step towards potentially limiting the frequency or types of flights from the Chinese Special Administrative Region to the United States. The move comes in response to a change in quarantine policies effected 20 February that asymmetrically benefit Cathay Pacific‘s cargo operations over all other operators.

The order does not change the number or type of flights that are permitted to the US, at least not yet. But the DOT reserves the right to decide that in the future:

We conclude that the public interest requires that the captioned carriers file their schedules for all-cargo, passenger, and combination services so that we may determine 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.

-US DOT Order

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Strict quarantines, except for Cathay

In late January the Hong Kong Transport and Housing Bureau (THB) put forth a rule requiring two or three week quarantine of all flight crews returning to Hong Kong. An exception was added, however, exempting crew returning from Anchorage, Alaska, to the rule. Cathay Pacific’s cargo division operates the route with multiple daily frequencies. The exemption significantly benefits Cathay’s operations.

FedEx also bases approximately 180 pilots in Hong Kong, operating flights within Asia. As part of its mitigation efforts FedEx relocated some crew to San Francisco, but the additional costs and crew requirements to maintain the intra-Asia operations are significant.

The company wants a similar exemption, allowing its pilots to continue operating within the region without the required quarantine. FedEx protested this new policy and the US government is taking action.

The manner in which Hong Kong has imposed its restrictions disproportionally impacts U.S. carriers to the exclusive benefit of Hong Kong carriers, and this imbalance denies U.S. carriers their bilateral right to a fair and equal opportunity to compete in the U.S.-Hong Kong market. The USG has relayed its objections to Hong Kong about this situation and has actively sought to reach resolution with Hong Kong that would reestablish a level playing field for both Hong Kong and U.S. carriers while providing the necessary public health protections. To date, Hong Kong has not responded in a manner that suggests a satisfactory resolution will be forthcoming.

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Other crew challenges, too

The DOT also calls attention to strict quarantine requirements for non-Hong Kong based crew since July 2020. The policies are described as “onerous” in the filing and give “rise to further concerns as to the denial of fair and equal opportunity, as they effectively prevent U.S. combination carriers from reinstating any passenger services to Hong Kong and force U.S. cargo carriers to reconfigure their Hong Kong operations so as to avoid layovers in Hong Kong.”

With these policies in place US airlines have all halted nonstop flights between the US mainland and Hong Kong. American Airlines and United Airlines now operate their cargo service via Tokyo-Narita, with crew making a turn at Hong Kong rather than remaining on the ground there. British Airways also runs crew on round trip routings rather than leaving them in Hong Kong.

Just spent another 29 hour stint on a 777 operating LHR-HKG-LHR. Here is our landing into Hong Kong yesterday. Or earlier today. I can’t really remember. pic.twitter.com/IzxKJy0KpX

— Ben (@JustAnother_Ben) March 15, 2021

What’s next??

The requirement for the filing of schedules is not in and of itself a crack down. Cathay can continue to operate unless the filed schedules are rejected. Based on what happened with passenger flights to the Chinese mainland and the US response, that seems likely. Figure a week for Cathay to submit its filing and then some time for the DOT to respond. But short of a reversal on the quarantine policy for the HKG-ANC sector, this one does not seem likely to clear up quickly.