Hong Kong airline worker shortage hits city’s push to reopen

HONG KONG – Hong Kong’s goal of reclaiming its spot as Asia’s premier financial hub is being tested by a scarcity of air industry workers vital for

re-establishing the city’s international links.

The damage caused by years of closed borders is proving hard to undo. The number of workers employed at the Norman Foster-designed airport at the end of December 2022 was just 68 per cent of pre-pandemic levels, according to the most recent figures provided by the Airport Authority of Hong Kong.

Airlines are struggling to hire staff locally, prompting carriers to put off resuming routes shuttered during the pandemic.

Qantas Airways delayed the restart of flights between the city and Melbourne by three months to mid-June because of a labour shortage at its contractor at Hong Kong International Airport, according to a source with knowledge of the matter who asked not to be identified as the information is not public.

Manpower constraints are making it tough for local start-up Greater Bay Airlines to add flights from Hong Kong, chief executive Stanley Hui told Bloomberg News in February. Even the city’s in-town check-in service has yet to reopen, another sign of the slow pace of recovery.

“The substantial loss of manpower is the crucial factor affecting the aviation industry,” said Mr Perry Yiu, a lawmaker representing the tourism sector.

“The shortage includes not only pilots, flight attendants and engineers, but also ground staff and grassroots workers.”

Worker shortages mean the city faces a hard battle to get capacity back to levels before 2020, when its airport was the world’s third-busiest in terms of international passenger volume, according to the government. As at January, air traffic movement was just 44 per cent of the level four years earlier, while passenger numbers were at 32 per cent, data provided by the Civil Aviation Department shows.

Compare that with London’s Heathrow Airport, where both air traffic and passenger volumes are more than 90 per cent of pre-pandemic levels. In Singapore, the number for both is around 77 per cent.

“We are now lacking hands, we need to fill vacancies,” said Ms Yolanda Yu, vice-chairman of the Board of Airline Representatives of Hong Kong.

Like elsewhere during the pandemic, Hong Kong air industry workers were let go as demand for flights plunged. The workforce at Cathay Pacific Airways, the city’s flagship carrier, fell some 40 per cent to about 16,000 employees in the first half of 2022 from the end of 2019, according to its latest earnings report.

Yet Hong Kong was far slower than other international travel hubs in

lifting its Covid-19 restrictions,

which were among the world’s most extreme. The city removed mandatory hotel quarantine for arrivals only last September, while those visiting after that still faced regular testing and bans on eating at restaurants until late 2022.

The lengthier curbs meant a greater impact on the local airline industry, which also needs to compete with employers in service sectors in a tight labour market. Since August 2018, Hong Kong’s workforce has dropped about 5 per cent to 3.8 million people, according to the latest official figures. 

Adding pressure is the ongoing exodus of residents. The population fell by 187,300, or 2.5 per cent, to 7.33 million from the end of 2019 to the end of 2022. The workforce is also ageing, while the birth rate in 2021 was the lowest on record going back to 1971. The economy is struggling, having shrunk in three of the past four years.

The government recognises the problems facing the airline industry, which is key to the city’s recovery. The air transport sector and tourists arriving by air previously contributed about US$33 billion (S$44.6 billion) a year, accounting for about 10 per cent of Hong Kong’s gross domestic product, according to a report published by the International Air Transport Association in 2018.

Transport Secretary Lam Sai-hung said earlier in February that the government will work with the Airport Authority to quickly come up with measures to help with the manpower shortage. The city is also looking at ways to alleviate the issue in the medium to long term, Finance Secretary Paul Chan said in his annual budget address last Wednesday.

One solution being floated is to bring in workers from mainland China and give them special work permits to fill vacancies at the airport, according to sources.

This is a measure supported by Mr Yiu. “I highly suggest the government consider reviewing” its labour policies, or import workers from nearby regions of the mainland, he said.

Businesses are currently allowed to import workers to fill jobs they face “genuine difficulties” recruiting for locally, according to city labour rules. But the number is small, with just 3,000 low-skilled workers imported in 2021. That is about 1 per cent of the number of similar foreign workers or semi-skilled workers that Singapore brought in to fill labour-intensive jobs like construction.

As for pilot shortages, carriers should focus on training cadets locally, the Transport Secretary told lawmakers on Feb 15.

For now, airlines and passengers have to be patient. 

“In Hong Kong, we would love to operate two flights, one from Melbourne, one from Sydney,” Qantas chief executive Alan Joyce said at the company’s half-year earnings media briefing. “They can’t handle that at the moment. So we have had to revert to one from Sydney.”

It may be a long road back to normality. Cathay Pacific chief executive Ronald Lam expects flight capacity to return to pre-pandemic levels by the end of 2024, according to a Feb 1 internal memo seen by Bloomberg News.

In the meantime, leisure and business travellers face the chance of ticket prices remaining elevated if demand rebounds, according to Ms Joanna Lu, head of consultancy for Asia at aviation data company Cirium. 

“The recovery is unlikely to be sudden or frictionless,” she said.

BLOOMBERG