Citing unfair treatment for U.S. carriers in Hong Kong, the United States will scrutinize Cathay Pacific’s schedule and if found to “adversely affect the public interest” may ban Cathay Pacific from both cargo and passenger service to the USA.
USA May Ban Cathay Pacific Due To Disparate Crew Treatment In Hong Kong
The issue stems from a February 5th order from Hong Kong mandating a strict quarantine for Hong Kong-based crewmembers returning from outside China. One exception was included in the order: crews returning from Anchorage would not have to quarantine.
As it so happens, flag carrier Cathay Pacific has a cargo hub at Ted Stevens International Airport in Anchorage (ANC). Most of Cathay’s cargo service to North America routes through Anchorage. FedEx, one of its main competitors, has a base in Hong Kong from which it operates within Asia.
Practically, the quarantine requirement impacted FedEx and not Cathay Pacific. With extended quarantine requirements for pilots, FedEx was forced to move crews to San Francisco, making intra-Asia operations much less efficient and more expensive. As a U.S. Department of Transportation report notes, this move incurred “significant operational costs and personal burden on its Hong Kong crewmembers.”
Hong Kong Blows Off U.S. Government + FedEx
FedEx and the United States government sought to work with Hong Kong on a compromise, but Hong Kong took nearly a month to respond and when it did respond, said only that it would consider the matter further. No timeframe was provided. Hong Kong also failed to explain why Anchorage was exempted.
Underlying the Open Skies agreement between the United States and Hong Kong is the guarantee of “a fair and equal opportunity to compete in the U.S.-Hong Kong market.”
Too Little, Too Late
As the DOT puts it, the consideration to create an equal exemption for FedEx is too little, too late:
“Hong Kong already has significantly harmed the U.S. carrier’s operations and drastically upended the competitive dynamics of the market by implementing an exception for Anchorage.”
Consequently, DOT has demanded that Cathay Pacific file its proposed cargo and passenger schedules so that is can “scrutinize” them (the implication is clear: Cathay Pacific faces an imminent ban if it does provide a quarantine solution for FedEx):
“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 federal law or adversely affect the public interest.”
In cases like this, the following usually occurs: the US threatens, the offending country backs downs, and life goes on. Will Hong Kong create an extra exception for FedEx operations in Hong Kong? I suspect the answer is yes.
image: Cathay Pacific