Cathay Pacific takes a tough COVID line

Courtesy Cathay Pacific

Cathay Pacific has one of the world’s most stringent COVID-19 regimes for its crew in line with the territory’s zero-infection goal.

Pilots flying passengers inbound from “high-risk” places such as Britain and the Untied States are placed on hotel quarantine for 14 days. Three pilots who were infected with the Covid virus were fired for breaching company rules when they left their hotel during a layover in Frankfurt, resulting in more than 270 people in contact with them being quarantined in a government camp for 21 days.

The Cathay crews are rostered on a “closed-loop” system, whereby they work for three weeks during which they stay briefly in Hong Kong in a designated hotel before a two-week quarantine on their final return. While this is on a voluntary basis, the take-up rate is said to be low such that Cathay is cutting passenger flights and converting some into cargo flights. This could not have come at a worse time ahead of the festive season. Staff morale is also said to be low and crew resignation rising.

While apologising for the several flight cancellations, a Cathay spokesperson said, “As the home carrier of Hong Kong, we are fully committed to protecting and enhancing Hong Kong’s aviation hub status and to keeping the flow of people and cargo between Hong Kong and the rest of the world moving despite the challenging circumstances presented by the pandemic.”

That may baffle a number of people who think that the territory’s harsh policy has damaged Hong Kong’s business status, helping neither Cathay Pacific nor Hong Kong International Airport.

FedEx has decided to shift its crew base out of Hong Kong, saying it would “allow us to continue to staff our Hong Kong and Asia flights without being subject to Hong Kong entry restrictions.”

British Airways has suspended its flights to Hong Kong to avoid the risk of any more of its crews being sent to a government camp after one of them tested positive for the virus resulting in the entire team being quarantined. Other airlines including Emirates and KLM operate flights to Hong Kong via Bangkok so that their crews do not disembark in Hong Kong.

One is apt to compare the fortune of Cathay with rival Singapore Airlines whose traffic has picked up as Singapore decides to live with the virus in a world that has begun to open up. Both airlines are dependent on international traffic, which explains how Singapore is actively negotiating “vaccinated travel lane” arrangements with other countries to allow quarantine-free travel.

But with the threat of a new variant, Omicron, this may set back the progress. In the looming uncertainty, Cathay may not be that worse off. Access to the large Chinese mainland domestic market without the restrictions may be a better bargain.

Cathay’s chief customer and commercial officer Ronald Lam said, “We do hope that sometime in 2022 the Chinese mainland government and Honbg Kong government may consider opening up.”

Although the full-year result will see a substantial loss, Cathay is expecting a considerably improved second half.

Vaccinated Travel: Will the euphoria hold up?

Courtesy Getty Images

IT is hard to resist the temptation to join the growing list of countries relaxing travel restrictions and opening up their borders, particularly when it means losing out in the competition for pent-up demand for flying.

Australia, for one, which has one of the strictest restrictions, is gearing up to open up sooner than expected. Qantas is making plans to resume international travel before the end of the year.

Singapore, without a domestic market to boot, has been active in promoting reciprocal VTL (vaccinated travel lane) quarantine-free travel with a slew of countries which include South Korea, Germany and, in the works, Australia. Singapore Airlines (SIA) and subsidiary Scoot are seizing the opportunity to operate a series of direct flights between Singapore and destinations such as San Francisco, Frankfurt, Munich and even Vancouver which SIA pulled out in 2009.

There is euphoria in the air, despite the continuing uncertainty of the pandemic as countries abandon the zero-Covid strategy and prepare to live with Covid instead. Interestingly, as Hong Kong being one which still sticks to that policy, market analysts are warning that Hong Kong International Airport risks losing its hub status if it does not follow the example of Singapore Changi Airport, and Cathay Pacific its market shares to other carriers.

Resurgence of the viral infection has been reported in countries such as South Korea, Germany and New Zealand. In the United Kingdom, a new Delta subset variant is breaking out and has been found to be ten per cent more infectious. As of October 20, England recorded 15,120 cases of AY 4.2, and secretary Sajid Javid reportedly said it could hit 100,000 a day. There is concern that the virus would hit North America next.

Singapore, which was very successful in keeping the infection numbers down at the outset is now reporting above 3,000 cases daily. Health Minister Ong Ye Kung said strict border controls are “no longer very relevant” according to local news media Today. Particularly so, as more people around the world are vaccinated.

It looks like the new normal. Live and let live. Will the euphoria hold up? Will there be a point when the tolerance level breaks down warranting a policy reversal?

Hard to say when there is neither a definitive nor a uniform global severity standard. This is aggravated by how countries are affected differently, and how the infection curve moves up and down. While cautious reopening seems to be the way forward, even that is hard to apply internationally (the mandate for masks as an example) and monitor in as much as it also varies from border to border.

Reciprocal arrangements may be the answer for cross-border travel, premised on the agreed parties being perceived as “safe”. But the situation may change unexpectedly. Germany, one of 11 countries with VTL travel agreements with Singapore, has reclassified Singapore as a “high-risk area” from October 24. Vaccinated travellers from Singapore can still enter Germany without the need for quarantine, but they must complete a digital entry registration.

Now Morocco is banning flights from the UK, disrupting travel plans of thousands of travellers, a sign that the world may be back to where it was. Flights from Germany and the Netherlands are also barred.

While it is good news for airlines that people starved for travel are snapping up seats, there are many others who are not prepared to deal with a very real chance that a sudden change in policy will disrupt their travel plans. Ultimately, it is how ready the people are taking to the skies. But, of course, airlines swear by the formula that supply generates demand.

Moving forward, as slowly and cautiously as it is necessary, may be inevitable as the lesser of two evils. The next three months will be critical. The number of infections can only be expected to rise with more borders being opened, but it is to be seen if the level is deemed reasonable and acceptable, that which shall become the new normal.

Skytrax World Airports Awards in a lacklustre year

IN a lacklustre year of diminished travel as a result of the Covid-19 pandemic, Skytrax continued to dish out its best airport award but with many categories held over until next year.

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Hamad International Airport in Doha, Qatar was named the world’s best airport in 2021, knocking Singapore Changi Airport off the top position which it held for eight years consecutively.

Skytrax CEO Edward Plaisted said of Hamad’s win: “As travel hubs worldwide have been impacted by the pandemic, Hamad International Airport was undeterred by the global travel disruptions and continued with its expansion plans while introducing additional airport health and safety standards.”

Without taking anything away from Hamad’s well-deserved honour noting its steady progress up the ranks in previous surveys, which means it must be doing something right, that does not say very much of how Hamad edged past the other candidates. Changi and others could take heart that if they seemed somewhat to be disadvantaged by a slowdown in activity, it was not their fault. The top honours are very much shared by a small number of the familiar names.

Skytrax’s top ten airports in 2021 are as follows: 1. Hamad International 2. Tokyo Haneda 3. Singapore Changi 4. Incheon International 5. Narita International 6. Munich Airport 7. Zurich Airport 8. London Heathrow 9. Kansai International 10. Hong Kong International.

The only change was Zurich moving back into the top ten and Central Japan International moving down to 11th position.

Istanbul International was named the most improved airport.

This year, Skytrax honoured the efforts of global airports in meeting the challenges posed by the Covid-19 pandemic. This was based on customer ratings of Covid-19 standards pertaining to information signage, enforcement of face mask usage, visibility and availability of hand sanitiser, social distancing markings and signage, enforcement of social distancing including seating, F & B arrangements and practices at security and immigration, hygiene procedures, and terminal and washroom cleanliness.

A list of 39 airports were honoured for Covid-19 Airport Excellence, among them eight of the top ten best airports. How about Tokyo Narita International and Munich Airport, one wonders.

Cathay Pacific does not expect second half-year to be better

Courtesy AFP

Following on the heels of Singapore Airlines (SIA) which a little more than a week ago announced a dismal but expected Q1 FY2020/21 performance (see Airlines need to incentivise travel, Aug 5, 2020), Cathay Pacific reported the first six months of 2020 in the words of its chairman Patrick Healy as “the most challenging… in its more than 70-year history.”

The Hong Kong carrier saw its passenger numbers plummeting 76 per cent year-on-year to 4.4 million passengers. It lost HK$9.9 billion (US$1.27 billion). The culprit, of course, was the Covid-19 pandemic which continues to plague the entire global industry.

The road to recovery will be a long one under a cloud of indeterminable uncertainty. According to the International Air Transport Association (IATA), global travel is unlikely to return to pre-pandemic levels until at least 2024. In the shorter term, Cathay does not expect the second half of 2020 to be any better than the preceding half.

“With a global recession looming, and geopolitical tensions intensifying, trade will likely come under significant pressure,” said Healy. “And this is expected to have a negative impact on both air travel and cargo demand.”

Both Cathay and SIA are carriers that rely solely on international traffic with no domestic market to fall back on, carrying a large amount of hub traffic through Hong Kong International Airport and Singapore Changi Airport respectively. At the peak of the pandemic, transit traffic was disallowed to pass through the two airports. Cathay may see a glimmer of hope as China – a huge market at its doorsteps – begins to slowly open up to include Hong Kong in its plans. But Healy was less than optimistic following continuing anti-government protests in the territory.

N the bigger picture, much of course depends on how the rest of the world is opening up. Both Cathay and SIA are literally at the mercy of policies that may restrict travellers from travelling out or into certain countries, the kind of loads across borders that keep the two airlines and others like them afloat.

Can Jewel Changi Airport continue to shine, for both Singaporeans and foreign travellers?

https://www.todayonline.com/commentary/can-jewel-changi-airport-continue-shine-both-singaporeans-and-foreign-travellers

(Courtesy of TODAY)

Skytrax Best Airports 2019: No surprises

Generally the Skytrax list of top ten airports does not surprise. It’s very much the same again this year, with the airlines staying in the same rank or switching positions one up or down. Frankfurt Airport is the ony one to drop out of the list, replaced by Tokyo Narita.

Courtesy Changi Airport

Singapore Changi wins hands down, a record seven years. With continuing construction of new facilities and upgrading works, it is one hard to beat. Changi pampers the travellers, and respondents give it top honours for leisure amenities. But it is ranked behind Seoul Incheon and the Japanese airports of Tokyo Narita, Tokyo Haneda and Centrair Nagoya for airport staff service. It is also second to Seoul Incheon for international transit.

Worthy of note is again the absence of North American airports but the rising popularity of Japanese airports. No surprise that Tokyo Haneda and Centrair Nagoya are the two cleanest, with Tokyo Narita and Kansai also in the list. Doha Hamad International is the only Middle East airport in the top ten, and you may ask where is Dubai International as the world’s busiest airport. The list is generally dominated by Asian airports, but European airports have managed to maintain some presence in the top ranks: Munich (7th), London Heathrow (8th) and Zurich (10th).

The modern airport is today more than a mere transportation centre facilitating movement from one place to another, but a metropolis in its own right as airports compete to keep the numbers coming. Shopping for example is an important feature, for which London Heathrow wins the day. So too is dining, for which Hong Kong is a consistent winner.

The form impresses, but it is empty if not supported by substance. The basics are still important, such as baggage delivery which according to the survey is best provided by Kansai.

A new category introduced this year – best website and digital services – sees the mention of an American winner: entity: Houston Airports System. By he way, Houston George Bush is ranked fifth for dining. So there is hope, America!

Never say never: Cathay Pacific enters budget market

Courtesy AFP

In 2015, Cathay Pacific together with Hong Kong Airlines opposed Qantas’ application to set up Jetstar Hong Kong Airways – co-owned with China Eastern Airlines and billionaire Stanley Ho’s Shun Tak Holdings Ltd. Cathay was particularly vehement about there being no room or need for budget travel in Hong Kong. The authorities were convinced and Jetstar HKG never took off.

Today, Cathay announced its decision to buy Hong Kong’s only budget carrier, Hong Kong Express Airways, for HK$4.93 billion (US$628 million). This expands Cathay’s stable of airlines to three, which includes regional carrier Cathay Dragon. It will boost Cathay’s market share to 50 per cent in Hong Kong.

A Cathay spokesperson said: “We intend to continue to operate Hong Kong Express as a stand-alone airline using the low-cost carrier business model.”

Now what caused Cathay to change its mind?

Cathay is not alone in facing stiff competition in the long-haul and premium market, from not only neighbouring rivals such as Singapore Airlines (SIA) but also Middle east carriers such as Dubai Airlines. Besides, Chinese carriers from mainland China are also fast expanding, flying direct and more services to Europe and North America.

At the same time, Cathay can no longer ignore the encroachment by the flourish of budget carriers in the region, particularly those operating out of mainland China. The Hong Kong authorities too may begin to realise how all this may be reducing Hong Kong International Airport’s hub status, particularly when limited options are resulting in Hong Kong being bypassed.

It could be a matter of timing. In 2017 Cathay reported its first annual net loss in eight years and introduced a three-year transformation program. It was later in that same year that Cathay CEO Rupert Hogg affirmed that Cathay had no plans to start a low-cost carrier. But the debt-ridden HNA Group which owns Hong Kong Express offers a timely opportunity not to be missed even as Cathay posted its first full year profit in 2018 of US$299 million.

The business climate can change fairly quickly, but unfortunately airlines may be slow in catching up with the changes because of the huge investment and lead time to implement many of the changes, apart from a host of other reasons, some of which could be largely circumstantial.

Many legacy airlines pooh-poohed the threat of budget airlines to their traditional market when it was first mooted, and as many of the carriers fell by the wayside before they could assert any impact.

SIA for one came on the scene later than most others, setting up Tigerair jointly with Ryanair, and then Scoot. Its strategy has changed yet again with the merger of Tigerair and Scoot, and now SIA is in the process of assimilating SilkAir into the parent airline.

One wonders if this is the path that Cathay may take should Hong Kong Express and Cathay Dragon find their services overlap as they expand.

Whatever the reading, it would be discreet to never say never. The question is always if so, when?

Same airports in Skytrax’s best ten 2018

The 2018 Skytrax list of world’s top 10 airports is a gentle rejuggling of last year’s list which may be divided into three parts. The top three airports remain the same as the next three, and so too the last three with Chubu Central in the same 7th position.

Courtesy Changi Airport Group

Singapore Changi tops the list for six consecutive years, a remarkable feat that according to Skytrax “is the first time in the history of the awards that an airport has won this prestige.” Its closest rival is Seoul’s Incheon International in second place, followed by Tokyo Haneda, which has been making impressive stride in recent years. In fact, Haneda was 2nd last year, and Incheon third.

The other airports in the top ten list are Hong Kong International (4th ), Hamad International (5th), Munich (6th), London Heathrow (8th), Zurich (9th) and Frankfurt (10th).

Changi scored with the best amenities, enhanced by the addition of a new terminal (T4) and the upgrading of Terminal 1. With continual upgrading works and the opening of the aptly named Jewel Changi Airport facility next year – a complex of gardens and more leisure activities – it looks like it may yet again achieve the top honour.

However, Changi is second to Hong Kong for transit and dining, and second to London Heathrow for shopping. It ranks behind Taiwan Taoyuan (1st), Incheon (2nd) and Tokyo Haneda (3rd) for customer service, and much lower in 7th position for baggage delivery. Incheon and Japanese airports score high in these areas. Not surprisingly, Japanese airports score top marks for cleanliness.

Don’t bet on the list changing much next year. Airports are massive investments that take time to materialise, and many of the existing ones are quite content to be functional and hopefully efficient than to be wowing! Yet note that Beijing Captial, which was one of the ten best from 2012 to 2015 has dropped to 34th position.

As appeared to be the order of the day, there is a noticeable absence of US airports with the first mention in Denver airport, ranked 29th. Canadian airports fared a little better, with Vancouver International which was among the ten best for three consecutive years 2012-2014 now ranked 14th but still the best in North America, and Toronto Pearson ranked 41st.

What do Conde Nast best airports have in common?

Yet again – and again – no surprise who tops Conde Nast’s pick of the best airport, or even the top five which are located either in Asia or the Middle East What do these airports have in common?

According to Conde Nast, they stand out “with enough amenities and time-wasters that you might be a little late boarding that flight.” Such frills include indoor waterfalls and great restaurants. In other words, they have to be more than just a fucntional facility for air transportation – however efficient although one must assume efficiency is a key consideration.

Courtesy Changi Airport Group

Top in the ranks is Singapore Changi, followed by Seoul’s Incheon, Dubai International, Hong Kong International and Doha’s Hamad International.

Size matters. They are all huge airports. Changi has a handling capacity of 82 million passengers a year. Incheon is adding a second terminal which will double capacity to 100 million passengers annually, and Dubai Intl is aiming for 200 million passengers yearly. Hong Kong Intl handled more than 70 million passengers last year. Opened only in 2014, Hamad Intl is fast growing, recording a throughput of 37 million passengers last year, an increase of 20%.

They are hub airports. Dubai is now the world’s largest airport for international passenger throughput, edging out London Heathrow. Hong Kong Intl is positioning itself as a gateway to Asia in competition with Changi, with connections to some 50 destinations in China.

They are supported by strong home airlines with extensive connections: Qatar Airways (Hamad Intl), Cathay Pacific (Hong Kong Intl), Emirates Airlines (Dubai Intl), Korean Air and Asiana Airlines (Incheon) and Singapore Airlines (Changi).

They are modern with state-of-the-art infrastructure, and are constantly upgrading. Changi has recently added a fourth terminal where passengers can expect hassle-free processes from check-in to boarding without the need of any human contact.

The Asian airports offer fast rail connections to the city.

And, they are all competing to provide the most alluring “time-wasters”. Changi made news when it offered a swimming pool where passengers with time on their hand could relax and soak int he tropical sun. Now that’s also available at Hamad Intl, where you may even play a game of squash too. While Dubai is known to be one of the world’s biggest duty-free shopping centres, Hong Kong Intl is reputed for its great restaurants. Incheon is uniquely Korean with its “Cultural Street” that showcases local cuisine, dance performances, and arts and craft workshops. It also boasts an indoor skating rink and a spa. Hamad Intl too has an exhibit hall for that cultural touch.

Changi comes closest to being a destination in itself where it is said a passenger wouldn’t mind a flight delay. Besides the swimming pool, there are: an indoor waterfall, a butterfly garden, a swimming pool, vast play areas for families with children, and an array of restaurants and shops. And for passengers with at least a transit of six hours, you can hope on a free city tour.

But, of course, all these would not mean much if they are not supported by efficiency and friendly service.

Asian airports dominate Skytrax best rankings

Courtesy Changi Airport Group

Not surprising that Singapore Changi clinched Skytrax’s 2017 Best Airport award for the fifth year running, commended for having the best leisure activities. As a hub airport, it is how best travellers are relieved of the stress of travel that will garner an airport favourable ratings. Changi is a favourite transit airport with its array of amenities, restaurants and shops.

What else can we infer from the survey said to be based on 13.82 million responses from 105 different nationalities, conducted from July 2016 to Feb 2017?

The top spots are held by familiar names of the last five to six years – Incheon International (3rd), Munich (4th), Hong Kong International (5th), Munich (4th), Zurich (8th) and London Heathrow (9th).

Incheon was ranked the best airport in 2012 before Changi took over in 2013, and until this year, it was a close second.

Special mention should be made of London Heathrow, which was the world’s busiest airport for international traffic until Dubai took the honours from it for two years now – Dubai did not make it to the list as being among the best.

It would appear that performance consistency is key, yet stagnation can lead to one losing the competitive edge. Changi has always prided itself as being innovative, constantly upgrading and expanding its facilities.

Making strides are Tokyo Haneda (2nd) and Doha’s Hamad International (6th). Tokyo Haneda was ranked 9th in 2013, 5th in 2015, 4th last year and 2nd this year. Hamad entered the top ten list at the bottom last year and made it up to 6th this year.

Besides Tokyo Haneda, there is a second Japanese airport in the list, namely Centrair Nagoya (7th). Tokyo Narita and Kansai Osaka were also ranked in previous years. It does say a lot about Japanese airport management.

It is no surprise that four Japanese airports are ranked among the top ten cleanest airports – Tokyo Haneda (1st), Centrair Nagoya (3rd), Tokyo Narita (5th) and Kansai Osaka (9th). Except for Zurich (8th) and Hamad (10th), this list is dominated by Asian airports, the others being Incheon (2nd), Taiwan’s Taoyuan (4th), Changi (6th) and Hong Kong (7th).

Similarly, the best airport staff service list is made up of nine Asian airports with the exeption of Vienna (10th): Taoyuan (1st), Incheon (2nd), Tokyo Haneda (3rd), Changi (4th), Centrair Nagoya (5th), Kansai Osaka (6th), Kuala Lupur International (7th), Tokyo Narita (8th) and Hong Kong (9th). Clearly service is an Asian strength.

One other Asian airport deserves some mention as the most improved airport – Jakarta’s Soekarno-Hatta Airport. Will it make it to the list as one of the world’s best?

By bow you have noticed that no airport outside Asia, the Middle East and Europe are listed in this year’s Skytrax top ten/ The only outsider was Vancouver International which was ranked 9th in 2012, 8th in 2013 and 9th in 2014. Yet again, this does not come as a surprise.