Cathay rallies as Hong Kong plans to ease air travel curbs

Hong Kong

CATHAY Pacific Airways shares jumped to their highest intraday level since June 2020 on Monday (Mar 21) morning as Hong Kong Chief Executive Carrie Lam announced that a flight ban on 9 countries would be lifted and mandatory quarantine eased to 7 days from 14.

The shares rose as much as 4.9 per cent before paring their gain to 0.8 per cent at the midday trading break, still in line for the highest close in a year. They were also the best performers on a Bloomberg gauge of Asia-Pacific airline stocks.

Cathay has been operating a skeleton schedule due to the tight restrictions on travel, including bans on services from key markets such as the US, UK and Australia as well as most transit traffic. Quarantine rules have also constrained aircrew.

Monday's rally took the stock's gain to 22 per cent for this year following slumps of 11 per cent and 29 per cent in 2021 and 2020, respectively.

Cathay said earlier this month that capacity of its passenger operations would remain at about 2 per cent of what it was before the Covid-19 pandemic while flight restrictions stood. Cargo capacity is about a third of pre-virus levels.

Hong Kong's easing comes months after other places in the region, apart from mainland China, started reopening their borders and adapting policies to live alongside the virus rather than continue pursuing a Covid-zero approach.

Lam said at Monday's news conference that the flight ban on 9 nations was no longer necessary and would be lifted on Apr 1, ahead of a previous plan for later in the month. The easing of mandatory quarantine is also a relief for travellers, who faced as long as 21 days in hotel isolation for much of the pandemic.

Cathay has been carrying about 1 per cent of its normal 100,000 daily passengers throughout the Covid crisis.

Hong Kong reported 246 deaths and 14,149 new confirmed infections on Sunday, the lowest daily toll in more than 3 weeks. Social distancing measures such as restrictions on dining-in at restaurants will be lifted in phases from Apr 21. BLOOMBERG

READ MORE: Hong Kong to lift ban on flights, ease quarantine measures