The United States and Hong Kong face a lose-lose scenario if global travellers are forced to pay higher airfares over the proposed barring of Cathay Pacific Airways from flying over Russian airspace to the east coast of North America, analysts have warned.
Wednesday’s warning followed calls by United Airlines for the Trump administration to ban Hong Kong’s flag carrier from flying over Russia for routes between the US and the city in a bid to force Cathay Pacific to align with other international airlines.
Last Thursday, the US Department of Transportation proposed banning mainland Chinese airlines from using Russian airspace to fly to the US, arguing that such carriers enjoyed a reduced flight time that put their American counterparts at a disadvantage.
Airlines set to be affected by the proposal include Air China, China Southern Airlines, China Eastern Airlines, Hainan Airlines, Xiamen Airlines and Sichuan Airlines.
Analysts said on Wednesday that if Cathay was included in the planned ban, the move would deal a blow to its North American operations, saddling it with higher fuel costs linked to longer flight times and reduced profits caused by a smaller passenger payload.
The airline currently operates five daily direct flights to New York, Boston and Dallas via Russian airspace.
The proposed ban represents an escalation in the trade war between the world’s two largest economies. It was announced after Beijing said last week that it would tighten controls on rare earth exports considered crucial to some US industries.
