Hong Kong Quarantines 130 Pilots, Stoking Supply Chain Fears | Business and Economy News

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Hong Kong, China – Hong Kong has forced 130 Cathay Pacific pilots to undergo 21 days of quarantine, raising fears that the aviation hub’s “zero COVID” policy could worsen a global supply crisis caused by the pandemic.

Hong Kong chief executive Carrie Lam made the announcement on Tuesday after three pilots escaped strict COVID testing protocols and tested positive upon their return to the international financial hub.

All aviation personnel who stayed at a hotel in Frankfurt, Germany, where the three pilots stopped over, should undergo 21 days of mandatory quarantine, Lam said.

Authorities have sent 130 cargo and passenger pilots, along with cabin crew, to a government-run quarantine facility in semi-autonomous Chinese territory, which imports more than 90 percent of its food.

“If there are one or two more cases like this, we could lose all of our cargo pilots,” Lam said at a press briefing, admitting that the move would have a significant impact on the chains of city ​​supply.

The decision “seems rather extreme,” said Shukor Yusof, founder of aviation consulting firm Endau Analytics. “Besides the inconvenience for pilots, it will likely also result in additional costs for the airline, at a time when its finances are under strain, and weaken Hong Kong‘s position as an airline hub.”

The move is the latest blow to Cathay Pacific, which is reeling from the impact of the pandemic and mass pro-democracy and anti-government protests in 2019. Once the pride of Hong Kong, the company has fired nearly 6,000 staff and laid off a regional airline in October last year. The airline reported HK $ 7.6 billion ($ 97.6 million) in losses in the first half.

Hong Kong is one of the world’s major aviation hubs [FILE: Paul Yeung/Bloomberg]

To bypass the city’s COVID-19 restrictions, the airline is considering moving its pilots to Dubai, Anchorage and Chicago, among other cities. It is also now demanding that all aircrew arriving in Hong Kong isolate themselves at home for three days and refrain from any social gathering.

To align with China’s coronavirus eradication strategy, Hong Kong has implemented one of the strictest quarantine regimes in the world, although it has not faced any major outbreaks since the start of the year.

The Lam administration justified the policy, which has frustrated foreign companies and expatriates, by citing the need to reopen the border with mainland China.

In a bid to keep Beijing happy, Hong Kong last month lifted most quarantine exemptions and further tightened pandemic control measures.

Authorities have refused to provide a timeline for reopening the international border, despite concerns from some health and business experts that the city’s “zero COVID” stance is not sustainable and risks undermining its international status.

Trinh D Nguyen, senior economist at Natixis, said Hong Kong and mainland China’s zero tolerance approach comes at a high cost, especially with the rest of the world gradually reopening.

The strategy required “fairly strict administrative controls on international and national mobility which can be quite costly economically, especially for Hong Kong as it depends on international mobility for key sectors such as tourism and finance”, Nguyen said.

Nguyen also warned that the impact could extend beyond the city.

“Tighter controls will further exacerbate challenges for Hong Kong, the regional and global supply chain, as Hong Kong is the busiest airport for air cargo of goods such as mobile devices, clothing, fruit. fresh and seafood, ”she said.

Contingency plans

But Tommy Wu, chief economist at Oxford Economics in Hong Kong, predicted the impact of the disruption would be limited.

“The overall impact on the operation of the airliner will not be severe, given that it may be able to recall some staff currently on unpaid leave if necessary,” Wu said.

“There are also contingency plans that the airliner can implement to temporarily move personnel to locations outside of Hong Kong to avoid strict quarantine restrictions, although these plans will incur additional costs. for the airliner. “

Speaking on Tuesday, Lam also defended the decision to grant a quarantine exemption to Jamie Dimon, chairman and CEO of JPMorgan Chase, who arrived in the city on a private jet on Monday.

“After all, it is a big bank, which has important activities in Hong Kong. Its route is restricted, so the risk is fully under control, ”Lam said.

In August, Hollywood actress Nicole Kidman sparked a backlash after being allowed to bypass quarantine rules to shoot her upcoming drama series Expats in the city.

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