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Tuesday, Jun 06, 2023

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

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

Hong Kong’s goal to reclaim its spot as Asia’s premier financial hub is being tested by a scarcity of workers in the air industry that’s vital for reestablishing 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 was just 68% of the pre-pandemic level, according to the most recent figures provided by the Airport Authority.

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

Qantas Airways Ltd. delayed the restart of flights with Melbourne by three months to mid-June because of a labor shortage at its contractor at Hong Kong International Airport, according to a person with knowledge of the matter who asked not to be identified as the information isn’t public.

Manpower constraints are making it tough for local start-up Greater Bay Airlines to add flights from Hong Kong. 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 Perry Yiu, a lawmaker representing the tourism sector. “The shortage not only includes 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 pre-2020, when the airport was the world’s third-busiest in terms of international passenger volume, according to the government.

As of January, air traffic movement was just 44% of the level four years earlier, while passenger numbers was 32%, data provided by the Civil Aviation Department show.

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

“We are now lacking hands, we need to fill vacancies,” said Yolanda Yu, vice-chair 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 Ltd., the city’s flagship carrier, fell about 40% to some 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 restrictions, which were among the world’s most extreme. The city only removed mandatory hotel quarantine for arrivals in September, while those visiting after that still faced regular testing and bans on eating in restaurants until late last year.

The lengthier curbs meant a greater impact on the local airline industry, which also needs to compete with employers in services sectors in a tight labor market.

Since August 2018, Hong Kong’s workforce has dropped about 5% 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%, to 7.33 million from the end of 2019 through 2022.

The city’s workforce is also aging, 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 recognizes 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 $33 billion a year, accounting for about 10% of Hong Kong’s gross domestic product, according to a report published by the International Air Transport Association in 2018.

The city’s transport secretary Lam Sai-hung said this month the government will work with the Airport Authority to quickly come up with measures to help with the manpower shortage.

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 people familiar with the discussion.

This is a measure supported by Yu, the lawmaker for the tourism sector.

“I highly suggest the government consider reviewing” its labor policies or import workers from nearby regions of the mainland, Yu said.

Businesses are currently allowed to import workers to fill jobs they face “genuine difficulties” recruiting for locally, according to city labor rules. But the number is small, with just 3,000 low-skilled workers imported in 2021.

That’s about 1% of the number of similar foreign workers that rival Singapore brought in to fill labor-intensive jobs like construction, or other semi-skilled workers.

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

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