CX Recovery

Expats arriving in Hong Kong for short-term work assignments or other temporary purposes tend to go through an interesting process if their stay becomes longer than originally intended for whatever reason. Gradually their country of origin becomes “back there” or “over there” and Hong Kong becomes home. What could be more natural when that happens than for Cathay Pacific to become their preferred choice of airline; after all they are Hongkongers now and Cathay is the recognised home carrier.

Persons born here do not need to go through this process of course. They just feel the carrier is closer to themselves culturally. They know how we like our noodles, you might say.

The Covid outbreak starting in early 2020 had a devastating impact on most countries and airlines, as international air travel was severely curtailed. Hong Kong was particularly hard hit: whereas airlines based in large countries such as the United States or even smaller ones like Japan could be bolstered by continuing demand for domestic services, for Hong Kong it is quasi international or nothing as even flights to and from the rest of China are subject to immigration and health controls.

Hong Kong’s Covid control regime was just about the strictest in the world with quarantine on arrival up to 21 days at its height. We were also among the slowest locations to ease up. Whereas many places were largely back to normal by early 2022, Hong Kong only started phasing out the main controls in July and finally dropped its mandatory mask mandate on 1 March 2023.

Different airlines responded differently to the situation according to their own experience, expectations and cultural norms. I have a friend working as a flight attendant for a Japanese airline, for example, who remained on full basic pay throughout the Covid saga but could not claim flight pay because the company had suspended the Hong Kong route. Singapore Airlines, a major competitor which is majority owned by government investment agencies, cut around 4,300 positions.

Cathay took a more pessimistic view. It suspended operations completely on some routes, and even those which were kept open substantially reduced frequency. Ticket prices increased as overheads had to be covered by a smaller number of passengers. But the main impact was on staff: large numbers of pilots and cabin crew were laid off by the airline and others quit because working conditions became less attractive. In October 2020 the company announced the first job cuts including layoffs and voluntary departures. It also closed its Dragonair subsidiary. Altogether about 4000 cabin crew and some 600 pilots were let go. Groupwide and worldwide, Cathay cut some 8,500 jobs of which around 5,300 were Hong Kong-based.

As the world largely returned to normal and air travel opened up again, demand for qualified personnel rose. Because Hong Kong maintained controls for longer than other places, its recovery efforts were also delayed and other airlines had a head start over Cathay in recruitment.

There was also an impact on the morale of those staff that did remain, and a well-publicised discipline case where crew were heard mocking the English language proficiency of some customers. The individuals were fired.

The CEO of Cathay. Ronald Lam Siu-por, was appointed in 2023 to lead the rebuilding of the airline. I sat close to him at a recent lunch where he made a speech on the progress of recovery operations. Based on what he said in the speech and in casual conversation, I am optimistic Cathay Pacific will be able to restore its worldwide network in terms of routes, frequencies, staff numbers etc on schedule by the first quarter of 2025, and ticket prices will start to come down.

I have a lingering concern about the staff issue but related more to morale than numbers. Having first arrived in 1972 I followed the localisation process described earlier. At first, I thought of England as home, but by 1979 the process of going home began at Heathrow and seeing the sign “CX 252 Hong Kong” at the Cathay check-in counter.

This feeling became even stronger as the years passed, and in the period 2000 – 08 I traveled over one million miles on Cathay in my capacity as first Director-General of Investment Promotion. A normal week in North America or Europe would begin with a flight to the first city at the weekend, with a full day programme there followed by a flight to the next city. Each day would be a series of company visits plus a speech to a business organisation and a press interview, then an evening flight to the next city. All with the objective of explaining the advantages of doing business in Hong Kong. By Friday night the team would be absolutely exhausted and more than ready for the return flight on the weekend. Wherever we were in the world, it was such a relief to see the Cathay check-in counter staff, to see the familiar uniform of the flight attendants as we boarded, to hear the captain’s voice on the loudspeaker system. We were with family and almost home.

Recently on personal journeys to nearby destinations in southeast asia and the mainland I have experienced the services of competing airlines. Suffice to say they have substantially upped their game, still short of Cathay at its finest but giving us a run for our money.

Lam is well aware of the need to restore and enhance Cathay’s reputation for quality of service. I also impressed upon him my view that it would be important to restore the sense of family.