https://www.scmp.com/news/hong-kong/...gtype=homepage

Hong Kong should fully regain status as international aviation hub by end of year, global airline body says

• International Air Transport Association director general Willie Walsh says he went from being pessimistic to optimistic over Hong Kong’s ability to recover its aviation hub status after seeing how fast Cathay rebuilt itself

The head of a global airline association remains upbeat about Hong Kong fully regaining its status as an international aviation hub by the end of this year, even though the city’s flag carrier had pushed back its target of restoring capacity to pre-pandemic levels to early 2025.
Willie Walsh, director general of the International Air Transport Association (IATA), told the Post in Dubai on Tuesday that he went from being pessimistic to optimistic over Hong Kong’s ability to recover its aviation hub status after seeing the speed with which Cathay Pacific Airwaysrebuilt itself.“I was quite pessimistic [before]. And that pessimism was driven by what we’d seen happening to Hong Kong, which we didn’t see in most of the parts of the world,” he said, referring to the city shutting itself off from international travellers and the carrier halting most of its operations during the Covid-19 pandemic.

What does this mean for CX’s impending implosion? Do we bring it forward too or push it back? I don’t know who to listen to anymore, thank god for the AOA

Walsh has rarely visited Hong Kong, let alone seen the vast collection post covid of Shark Tick tails clustering the aprons at all hours of the day. The frequency of movement to pre covid levels pretty much reflects the replacement of high volume wide bodies with single isle types. It appears the 321's for CX are the more frequent types now using Manila and not 777 and 330 and its my guess thats the CX management's way of allying the stats of volume with frequency.

Obviously it’s not imploding, but it sure isn’t shining either.

Cargo is fortunately saving the day (again!), but passenger-wise we’re struggling to recover past 65% or so of pre-covid levels. We have basically been treading water over the last six months (hint, one needs CNs and FOs to move airplanes, and they’re still leaving almost as fast as they can be trained from within or hired from outside).

China Southern has started direct flights every Thursday and Sunday from Harbin to Hong Kong return.
This is in response to China granting individual traveller visas to HKG.
New business for HKIA, but CX unable due to lack of pilots.

The main point is that the recovery is going well and calls of the demise of our loved employer had been slightly exaggerated. The usual suspects were wrong (again) and the wise and cool-headed among us foresaw that correctly a long time ago (you are welcome ;-).

On top of that, Chinese mainland airlines are not at pre-Covid levels either yet, and 3 out of the 4 big players operate at a loss. Also I would be highly sceptical about the profit potential of tourism pax to second and third tier mainland cities, this is no doubt a low yield and extremely price sensitive segment.

true but UO seems to be doing more than pre-covid so I guess they have taken some of the low-end / budget customers previously handled by CX/KA

Imploding to not existing - obviously not.

But it will take Cathay years and years to recover to what they were. Meanwhile their competition has overtaken, expanded and possibly taken many frequent flyers and business accounts.

The government stood of Cathay’s throat during COVID. That was hard enough.

But totally moronic (or self serving) management decisions contributed significantly to the ****ehole of a situation the airline finds itself in just now.

Better people would have managed the airline to a better position by this point.

Zoot, sadly, since the move from Kai Tak, the management left their meritocracy behind at the checker board and the sycophants took over..the real organic ones that live in that parasitic world of higher management colons..whatever management shoes were left to fill, they were all way too big for the morons that stepped up to try the gig..and sadly the legacy is what you see now..no leadership means stasis..sad really....

Interesting. I was just in hk 2 weeks ago. You'd never see that many cx tails parked all over the airport at mid day before covid. To think they can make it look like it used to (fully utilize all aircraft like they used to) is really funny. I'd have to see it to believe it. Propaganda talk won't do.

Hk itself is far from recovered to pre covid. Nothing even close to the crowds that regularly filled various businesses. The economy is down and flat still. They don't know what to do with various maga building projects close to completion with the commercial vacancy rates well below normal existing presently.

Who will fly on this restored capacity they dream of anyway? Locals aren't spending money like before. I certainly didn't see anywhere near the amount of tourists we used to see in hk back in the day. Good paying jobs expats used to come to hk for don't exist anymore. Not just pilot jobs and others, but Specifically those high paying banking jobs are gone along with the tax income and spending back into hk economy that came along with.

High roller club table bills i used to see paid at $50,000 hkd don't exist anymore. When i asked a certain club owner i used to frequent often what happened to those tables he told me those tables don't happen anymore, those bankers and corporate lawyers are gone. Half laughing, half crying. LKF still looks like a ghost town compared to how full of people it was before. More and more people are going to shenzen for shopping and even just for dinner spending their money there because they don't have the money like before and it's so much cheaper there.

Who will spend into this dream of restoration to pre covid?

Still watching with popcorn and waiting.

V, I still live in HK and I see more and more locals, including expats, using LCC in preference to CX for their travel missions..Asia Miles customers are frequently blocked from upgrades due to 321 fleet coming more on line and Cebu/ Air Asia have some great frequent flyer initiatives that strangely include optioning in to exec lounges!!!

My suggestion would be to avoid an anecdotal perspective and concentrate on the hard data alone. Counting tails or number of champagne bottles sold is unhelpful. What does that prove? Change is easily mixed up with demise, especially from the perspective of the inevitible losers change always brings with it. Maybe the new big spender is now a Chinese CEO buying rounds in a Kowloon karaoke bar we never heard of. Tiger, how do you "see" locals taking more LCC? And what is "more" and is it bad? LCC are a global trend, of course they will grow, as will Cathay's own UO. Subjective evaluation results most likely in overweighting isolate phenomena and losing focus of the overall data. It is not possible to "see" or "feel" the state of the economy.

Like it or not ( I sure don't), but the future success of HK is not dependent on expats having fun in LKF. China won, freedom is dead, long live HK. HKIA growth rates, traffic numbers, profit of airlines, outlook from analysts, that is what counts when we talk about business. The relevant statistical key figures all indicate clearly that HKIA will soon surpass pre-covid traffic numbers and high profit for CX. Meanwhile Cargo traffic at HKIA is already global number one. Again.

Klinger..I have gone man bush and left my expat status a while back. I do however fly LCC out of HKG regularly and see many more locals and destination nationals AS well as non Locals.
I disagree with your interpretation of "feeling" the economy. The optics of closed shops and re rentals, the fact that its a buyers market whether its property, boats, cars and even vacation deals..shows that HKG is thread bare economically and struggling to identify other markets that traditionally was either thin or just not available...hence the pressure on getting better routes muscled out of HKG, such as Harbin et al in China and now Saudi. Yes, CX did Dhahran and Riyadh years ago but now this is about defining new markets as opposed to route delectation. Kuwait is also on the radar for the very first time from HKG !

"LKF expat fun" is at such a low key compared to pre covid, it makes one wonder if expats ever do more than get old over crappy beer in Wanchai or may not even be in HKG at all!! Ultimately, the stasis of what defined HKG is in for major change and I for one, with skin in the game here, wish it can succeed. Personally, I believe the future is in LCC concepts with the legacies remaining on thick routes that fall under more robust management in IATA as opposed to the reins that China are demanding of CX.

A "buyer's market" in the real estate segment does not necessarily prove weakness of the economy overall, it only reflects higher supply than demand in one specific sector, at the present moment. Think about the nature of cyclical movements and you should have second thoughts.

LCC growth does not necessarily correlate with negative growth of other aviation segments. Plus your own position within the LCC results in an overweighted experience of phenomena in this particular segment. Destinations and route restructure of an airline does not show you much without the corresponding data, the yield etc.

Closed shops in one area do not necessarily point to a bad overall economy, it can also simply show changing consumer preferences. Business might just have moved, from mall to online for example. Nightlife was concentrated in LKF and Wan Chai 20 years ago, now you have dozens of new areas, more choice, different customers etc. Shopping might no longer be the promising business model it once was, but that does not necessarily mean the overall HK business model is broken, but revenue might not be as "visible" as before. You don't "see" people buying online, working from home, you don't "see" financial markets, offshore trading, capital movements etc.

Some key figures:

GDP growth rate in Hong Kong in 2024

According to the revised figures released today by the Census and Statistics Department, real GDP grew by 2.7% year-on-year in the first quarter of 2024 (same as the advance estimate), having increased by 4.3% in the preceding quarter.

HKIA traffic growth

For the first quarter of the year, the airport handled 12.7 million passengers, marking an increase of 81.7% compared to the low base during the same period in 2023. Flight movements registered a year-on-year increase of 63.7% to 86,210. Cargo volume rose by 18.9% year-on-year to more than 1.1 million tonnes.

Unemployment rate low and continues to fall

The seasonally adjusted unemployment rate stood at 2.9% for the period between December 2023 and February 2024, unchanged from November 2023 to January 2024, the Census & Statistics Department announced today.18 Mar 2024

Hang Seng Index up 10.37% this year

Inflation

Consumer price inflation in Hong Kong averaged 2.5% in the ten years to 2022, above the Asia-Pacific regional average of 2.1%. The 2022 average figure was 1.9%.

Cathay Profit and Traffic numbers

Hong Kong’s Cathay Pacific reported its highest annual profit in more than a decade as strong travel demand buoyed the Hong Kong flag carrier’s earnings, with its chair declaring: "In 2023, we finally left the Covid-19 pandemic behind us.”The airline posted net profit of HK$9.8bn ($1.3bn) for the year on Wednesday, breaking a three-year streak of losses including a HK$6.6bn loss in 2022. Cathay shares rose nearly 4% after the earnings were released.

Cathay has been imploding for 15 years.

with seemingly zero impact then ?

Property values are down over 41% in the past 36 months, Kong Kong is the worst performing property market in OECD. It is beyond weakness, it is a plummeting economy. They cut stamp duty and the actual decline in property prices accelerated. Banks are loathed to loan, the HKMC, ie the Government, won't even step in with mortgage assistance like it has in the past. I get there's always going to be some pro HKG drivel on here but face the facts, they're running budget deficits from here on in until China steps in to avert disaster. The younger generation are demanding massive social policy spending programs with the current tax system that can't pay for it.

HangSeng was at 30,000 6 yrs ago down to 16,000 now and you're excited about it being up 10% from that 16,000.

I could go on.

The only CX numbers that matter are the transit pax.

zero impact?
airframe utilisation at record lows.
airframe replacement slowed
airframe age increasing = tax depreciation schedule deminishing
Aircrew head count >1200 less than precovid. (senior crew ie experience levels)
Airbus crew doing 100 hrs/ month , some with 3 months off a year as a result
route structure at same levels serviced in 2008 in most areas.
Group daily pax numbers at 2008 levels
CX stock price at $7.99, last time that was seen was seen was 30 April 2009
These figures are readily available so why do you bother ?
They didnt just commit a ungodly act of the goose that laid the golden egg, they then plucked it, cut it's bloody head off and dropped it in a pot of boiling water just to make sure the plucker was dead.

The goose looks to be still laying golden eggs - and with increasing frequency " fire wall".