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Pandemic Geopolitics Snare Airlines as U.S., Hong Kong Spar Over Crew Quarantines

Madhu Unnikrishnan
March 18th, 2021 at 2:04 PM EDT

Until now, countries have played nice with each other to ensure that air cargo and commercial airline service continued during the pandemic. But one year in, geopolitics, particularly deep tensions between the U.S. and China on trade, are threatening what had been surprising cooperation in the crisis. 

The U.S. Transportation Department (DOT) has ordered all Hong Kong-based airlines to file their flight schedules to the U.S. seven days in advance for the agency to review. The order applies to all passenger and cargo flights operated by Cathay Pacific, Hong Kong Airlines, and Hong Kong Express. Although the U.S. and Hong Kong do not have an open skies deal, the 1997 air services agreement liberalized air service between the U.S. and what was then a U.K. colony and does not require airlines from either side to get approval for flight schedules.

At issue is a new Hong Kong rule that mandates two- or three-week quarantines for flight crews that enter the territory from any other country. Notably, Hong Kong provided an exception for crews that operate flights between Anchorage and Hong Kong, a route Cathay Pacific flies. “This carve out effectively provides Cathay Pacific with the ability to continue those operations without impact from the new crew quarantine requirements,” DOT said in its order.

FedEx, however, maintained a crew base in Hong Kong for intra-Asia flights. Those crew members would have been subject to the quarantine, which FedEx said would essentially have ground its Asia flights to a halt. FedEx has petitioned the Hong Kong government to provide a similar carve out for its intra-Asia flights, but the government has thus far refused. The carrier has temporarily relocated its Hong Kong crew base to San Francisco.

“We hope that the action taken by the U.S. Department of Transportation on March 16 will aid in resolving this matter,” a FedEx spokesperson told Airline Weekly. “Hong Kong is an important market for FedEx, and we continue to operate and serve our customers there with the safety and well-being of our team members as our top priority.”

Hong Kong’s ruling effectively disadvantages U.S. carriers and abrogates the air service agreement’s clause requiring fair and equitable treatment of airlines from both countries. “We find that Hong Kong has, over the objections of the U.S. Government, impaired the operating rights of U.S. carriers,” DOT said.

“The Hong Kong government’s exception for Cathay Pacific’s Anchorage, Alaska, cargo operation from those quarantine requirements puts U.S. carriers at a significant disadvantage,” Air Line Pilots Association (ALPA) President Joe DePete said in a statement. “ALPA applauds the DOT for their quick action on this very important issue and their efforts to restore a level playing field in the U.S.-Hong Kong market.”

The Chinese government objected to DOT’s order and through the state news media called U.S. allegations “unfounded,” “baseless,” and said it does “not serve the public interest.” How the Chinese government may retaliate remains unclear.

The row is the latest example of escalating trade and political tensions between the two largest economies in the world. Hong Kong has become a flashpoint in the row, as the U.S. has criticized a new Chinese security law that applies to the nominally self-governing territory and to changes to the way the local legislature is elected.

Madhu Unnikrishnan
March 18th, 2021 at 2:04 PM EDT

Photo credit:  FedEx

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