Airlines

Hong Kong flight bookings drop 10% as protests continue, says Qantas CEO

Key Points
  • Qantas Airways is planning to cut its capacity by 7% on Hong Kong flights, said its CEO Alan Joyce, adding that it will switch to smaller aircraft on those routes.
  • The airline will now shift its bigger aircraft capacity to other markets such as Manila and Singapore, which are showing "really strong growth," Joyce said.
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Flight bookings to Hong Kong have fallen 10%, hit by prolonged unrest in the city, said Alan Joyce, the chief executive of Australian carrier Qantas Airways.

The airline is planning to cut its capacity by 7% on Hong Kong flights, he said, adding that it will switch to smaller aircraft on those routes.

"Anytime we've seen some political unrest ... we do see a hit that happens. Usually that's short term and the recovery once the issue is resolved ... happens very rapidly," said Joyce, speaking to CNBC after the airline posted results on Thursday. "We are seeing around a 10% drop in our Hong Kong volumes."

Hong Kong has been crippled by protests which are into their 12th week. The rallies started out as a demonstration against a proposed extradition bill which has since been suspended. However, they turned increasingly violent and have disrupted various sectors — such as retailers and real estate — as well as the city's public transit system.

Anti-government protesters attend a demonstration at Hong Kong Airport, China August 13, 2019.
Thomas Peter | Reuters

The turning point for air travel came when protesters staged sit-ins at the city's airport for several days, crippling one of the world's busiest terminals. Earlier in August, all flights at Hong Kong's international airport were canceled — twice — due to protests.

Qantas will now shift its bigger aircraft capacity to other markets such as Manila and Singapore, which are showing "really strong growth," Joyce said.

"We'll take advantage of moving that capacity around. While it is having an impact, we're hopeful that it will be in the short term, and our ability to match supply and demand helps us manage the issues around it," he said.

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The chief executive said the company's China to U.S. freight business has been weak, as the air freight sector has been hurt by ongoing trade tensions between the world's two largest economies.

The Australian carrier posted a 17% fall in annual net profit on Thursday, driven by fuel costs and a weaker Aussie dollar. Underlying pretax profit, the airline's most closely watched measure, was A$1.30 billion ($881.66 million) for the year ended June 30 — down from A$1.57 billion.

In other plans, Joyce told CNBC that the airline is planning its first non-stop flights from New York to Sydney, and London to Sydney, aiming to have those flights operational by 2022.

— Reuters contributed to this report.