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Airlines across Asia hit hard by political strife

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September 1st 2019

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The Sino/U.S. trade war, the Japan-South Korea dispute and political upheaval in Hong Kong are wiping millions off the balance sheets of several airlines in the region, most particularly in North Asia. Read More »

With Hong Kong protests extending into their fourth month as we go to press, Hong Kong-based airlines as well as scores of carriers flying into one of the region’s most profitable hubs, are witnessing passenger load factor going through the floor on some crucial business and leisure routes. Air cargo, while healthier in some markets, is continuing its decline in the world’s biggest air freight centre.

Protestors targeting aviation, an industry vital to Hong Kong’s economic health, is unforgivable. In this case, as in Japan and Korea, the airlines serving the airport are victims of politics. And mostly they can do very little about it.

The U.S.-Sino trade war has had a serious impact on air freight business across the region. Asian airlines carry 35% of global air cargo. A lot of that cargo flies in the bellies of passenger aircraft. The images international travelers, whether leisure or business passengers, are seeing from their living rooms is a Hong Kong, always regarded as a highly functional metropolis, in disarray. It has become a place to avoid for many.

The Japan-South Korea conflict has forced airlines to cancel or downsize aircraft on routes between the two countries, to the detriment of the bottom lines of all carriers involved.

International Air Transport Association vice president, Asia-Pacific, Clifford Conrad, told Orient Aviation last month “the U.S.-China tensions, coupled with the performance of the Chinese economy, are contributing to the weak cargo performance in the region”.

“The situation could worsen depending how the trade dispute between Japan and South Korea plays out. Potentially, it could impact the supply chain networks of the electronics market, an important segment for air freight,” Clifford said.

It has been said so often that there are no winners in a trade war. The same applies to occupying an airport and forcing flight cancellations or delays for thousands of passengers. In the case of Hong Kong, the series of departure and arrival precinct occupations and blockades on routes that approach the airport achieved the own goal of damaging Hong Kong’s reputation and therefore its economy.

Also to be considered are the huge costs incurred by carriers to accommodate stranded passengers, divert flights around the region and keep staff moral intact during the confrontations. This is not the way to win hearts and minds to a cause.

Associate editor and chief correspondent
Orient Aviation Media Group

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