Business
Once the pride of Hong Kong, Cathay Pacific becomes government’s punchbag
For decades, Hong Kong’s Cathay Pacific Airways (CPA) stood as a proud symbol of the city’s international status and an exemplar of Asian aviation.
These days, the flagship carrier is treated more like the Chinese-ruled financial hub’s bete noire, regularly receiving severe scrutiny and criticism from its own government as it struggles to recover from the fallout of the COVID-19 pandemic.
After Cathay cancelled more than 700 flights scheduled between December and February, Hong Kong Chief Executive John Lee Ka-chiu told local reporters he was “very concerned” and wanted local aviation to “rebuild its capacity fast”.
Criticism from the Transport and Logistics Bureau was followed in March by Cathay CEO Ronald Lam Siu-por being subject to a public grilling by the Legislative Council, where lawmakers slammed the airline’s “chaotic management”.
In an article the following month, the pro-Beijing South China Morning Post newspaper published an article with the headline: “Can Cathay Pacific get its act together, or is it time for Hong Kong authorities to take a stake in the airline?”
The Hong Kong government has so far rejected calls to take a stake in Cathay to ensure the semi-autonomous territory’s status as an aviation hub, a scenario envisioned in Beijing’s 14th five-year national plan – a practically sacred text in Hong Kong business circles these days amid the growing influence of the Chinese mainland.
“It is not the government’s intention to become a long-term shareholder of CPA,” a spokesperson for the Transport and Logistics Bureau told Al Jazeera.
Most observers agree with the Hong Kong Aviation Officers Association’s (HKAOA) assessment that a pilot shortage is at the core of Cathay’s woes – the result of Hong Kong imposing some of the world’s longest-lasting and most draconian travel restrictions during the pandemic.
In January 2020, more than 5.7 million passenger movements were reported at Hong Kong International Airport (HKIA).
By April, the figure had dropped to just 31,739 – about 0.55 percent of pre-pandemic levels.

Despite its heavy reliance on international travel and trade, Hong Kong was one of the last jurisdictions on the planet to reopen to the world, only fully lifting restrictions in early 2023.
Cathay’s management fired 1,000 pilots in 2020 and saw a further 1,000 resign over the next couple of years, according to the HKAOA.
Many pilots who quit cited the stress of complying with Hong Kong’s ultra-strict quarantine rules, which forced the airline to operate “closed loop” flights, where crew were required to isolate for five weeks in a hotel followed by two weeks at home.
Cathay has said it has more than 2,900 pilots, including at its subsidiary budget carrier Hong Kong Express, but needs 3,400 to restore pre-pandemic capacity.
It has announced “robust plans” to hire another 500 pilots.
Some observers have said the government’s criticism is especially unfair given that its rigid restrictions caused many of Cathay’s difficulties in the first place.
“Cathay is still one of the best-performing airlines in the world with good financial performance compared to the three top Chinese carriers – reporting about 10 billion Hong Kong dollars of profit,” Zheng Lei, chair of the Department of Aviation at Swinburne University, told Al Jazeera.
In March, Cathay reported its first annual profit in four years of 9.78 billion Hong Kong dollars ($1.25bn).
“We achieved our end-2023 Group target of 70 percent pre-pandemic passenger flights as planned, only 12 months after Hong Kong opened up. We will reach 80 percent within this quarter, and we are working towards reaching 100 percent within the first quarter of 2025,” a Cathay Pacific spokesperson told Al Jazeera.
“The city has been our home for more than 77 years, and we represent Hong Kong on the global stage as its home carrier,” the spokesperson added.
While these encouraging results prompted CEO Ronald Lam to proclaim that “Cathay is back”, few in government circles seem to be celebrating their flag carrier’s return.
“Some of the government criticism might be justified in relation to flight cancellations, service and chaotic management – these issues need to be addressed. But Cathay has done a lot to rectify the situation, and they are actively recruiting pilots from China,” Lei said, adding that improving customer service is much easier than turning around a loss-making airline.

Cathay received significant government financial support during the pandemic, which critics argue imposed a moral obligation on the airline to maintain its standards and human resources.
“For me, the key point is that the Hong Kong government stepped in to support Cathay Pacific so the Hong Kong aviation sector would be preserved – and it wasn’t,” Paul Weatherilt, chairman of the HKAOA, told Al Jazeera.
Lei agreed, pointing out that mainland China’s top airlines did a much better job at staff retention.
The government in June 2020 provided Cathay with a 7.8 billion Hong Kong-dollar ($998m) bridge loan and purchased shares with detachable warrants of 19.5 billion Hong Kong dollars ($2.49bn).
Cathay redeemed half of the preference shares held by the government in December 2023 and the loan option was never exercised.
Weatherilt said Cathay had taken advantage of the pandemic to force permanent redundancies, pay cuts and worsened conditions on staff.
“Of course, China was slow to emerge from the pandemic, but nearly every other airline made temporary cuts and tried to keep core skills and assets in place,” Weatherilt said.
“Cathay has left Hong Kong aviation in a sorry place.”
The Hong Kong government has said that when it offered financial support, it specifically requested Cathay to “fully consider the potential impact on Hong Kong’s status as an international aviation hub and Hong Kong’s aviation network”.
Weatherilt said the government’s stance leaves the airline in a vulnerable position.
“Swire should be extremely worried because it stands out like a sore thumb – the company that controls Hong Kong aviation is ultimately run by a company in London,” said Weatherilt, referring to John Swire & Sons Limited.
As China tightens its control of Hong Kong, politics and colonial baggage stemming from Britain’s former administration of the territory increasingly lurk beneath the surface in business.

Cathay has been in Beijing’s cross-hairs since mass pro-democracy protests swept the territory in 2019.
Rupert Hogg, Cathay’s British chief executive, and Paul Loo, the chief customer and commercial officer, resigned in August of that year following pressure from the Chinese authorities to crack down on employees who supported the protests.
At the same time, pilots were subject to rigorous new ground checks imposed on any Cathay aircraft landing at airports in mainland China.
Chongxian Ma, deputy secretary of the Communist Party Committee of Air China, was made a non-executive director of the company in June 2021. Two more Communist Party non-executive directors were added to the board in May 2022 and July 2023.
In May last year, Cathay issued a public apology after a recording of flight attendants making fun of a non-English-speaking passenger was shared on social media.
When Bloomberg reported earlier this year that Beijing-based Air China was considering increasing its 29.99 percent stake in Cathay, some observers assumed it to be part of China’s patriotic drive to obtain a firmer grip over Hong Kong’s flag carrier.
However, one industry insider, speaking on condition of anonymity, told Al Jazeera that the move was more likely based on financial logic, as Air China depends on its Cathay stake to offset its own financial losses.
While ousting Cathay as Hong Kong’s flag carrier in favour of a Chinese-owned operator might please some nationalist elements, there is little dispute that there are no credible alternatives to Cathay, at least not in the short or medium term.
“It would not be easy for the government to develop an airline as an alternative flag carrier – it’s not feasible and not a good idea,” Lei said.
Some observers believe that British-owned Cathay Pacific presents a convenient target for politicians eager to boost their patriotic credentials, especially since criticism of the government has become highly sensitive and potentially illegal under the Beijing-drafted National Security Law passed in 2020.
On Wednesday, Hong Kong lawmaker Jeffrey Lam Kin-fung told local media that Cathay should roll out direct passenger services to the eight small Chinese mainland cities recently chosen by Beijing for relaxed travel restrictions to Hong Kong.
This would “fully capitalise on Beijing’s goodwill measures”, Lam said.

Inevitably, political interference is a growing concern.
Using Cathay as a public punching bag could be counterproductive for Hong Kong as it struggles to re-establish itself as a vibrant city, financial epicentre, tourism hotspot and business gateway to China.
Unlike Hong Kong’s stance towards Cathay, Dubai’s government did not attack Emirates Airways after tens of thousands of its passengers were left stranded in April following extreme flooding in the United Arab Emirates.
“Cathay will never complain in public, but they have good reason to feel aggrieved,” one industry insider who works closely with Cathay management told Al Jazeera on condition of anonymity.
While local rival Singapore reported a return to pre-pandemic passenger activity in February this year, Hong Kong still lags behind.
Passenger traffic at Hong Kong International Airport for March 2024 was 4.35 million – about two-thirds the figure during the same month in 2019.
“There must be collective responsibility for the loss of interest in Hong Kong, which arose partly from the protests of 2019 – which greatly damaged the SAR’s reputation as an aviation, financial and tourist destination – as well as the draconian measures imposed during COVID,” Shukor Yusof of Endau Analytics told Al Jazeera, referring to Hong Kong’s official designation as a Special Administrative Region.
Hong Kong’s image has also been battered by negative media coverage of its crackdown on dissent, including the high-profile prosecution of former media mogul, Jimmy Lai.
As both Hong Kong and Cathay seek to rebuild, what is certain is that their fates remain inextricably linked.
“If the government wants to develop Hong Kong as a finance hub and if Hong Kong is to return as a hub for global aviation, more support should be given to Cathay Pacific Airways, rather than criticism,” Lei said.
[Aljazeera]
Business
ADB intervention offers an oasis for Delft, but basic infrastructure remains a daily struggle
A tour reveals the widening gap between Delft’s tourism promise and the realities of island life
By Sanath Nanayakkare
Stepping onto Neduntheevu – better known as Delft Island – can feel like slipping off the edge of the map into one of Sri Lanka’s least-explored frontiers.
For the traveller seeking an escape from the urban grid, this remote island off the Jaffna peninsula offers an alluring picture of a forgotten paradise: wild horses, coral and limestone fences, sun-bleached dwellings and a community accustomed to life at the margins.
But beneath that romantic veneer lies a far harsher reality.
For the people who live and work here, survival remains an everyday balancing act shaped by inadequate infrastructure, acute water scarcity, unreliable transport and growing frustration over what they see as years of neglect.
Some crucial lifelines, however, have begun to reach these distant shores, largely through the intervention of international development partners.
The Asian Development Bank (ADB) has played an important role in strengthening water security on Delft, through a Sea Water Reverse Osmosis (SWRO) plant designed to provide a critical source of potable water to the island.
The plant was designed with an initial capacity of about 50 cubic metres – or 50,000 litres – of potable water a day, with the potential to expand production to 100 cubic metres. At present, it supplies roughly 40% of Delft’s population.
For residents and local businesses, the plant has provided much-needed relief. Yet operational constraints mean that it currently runs for only about 20 minutes a day, limiting the volume of water available and forcing households and businesses to find additional sources simply to meet their daily needs.
Few understand that struggle better than Vithushan Arul Ranjan, affectionately known as Tommy, a young Energy and Environmental Technology graduate of the University of Sri Jayewardenepura. In 2021, Vithushan launched Delft Village Stay on family land as a community-based tourism venture. It has since grown into an award-winning eco-retreat accommodating up to 25 guests in eco-huts and traditional rooms.
His enterprise has received recognition at both regional and international levels, including the Northern Province Tourism Award 2025 and a recommendation in the 2025 edition of the Lonely Planet Guide.
His business is built around responsible tourism, with an emphasis on bringing economic benefits to the local community. But operating an eco-retreat on one of Sri Lanka’s most isolated islands comes at a considerable cost.
“It is almost impossible to focus on the business when we are constantly in survival mode,” Vithushan says.
Georgie Unsworth, a UK/Belgium visitor turned team member at Delft Village Stay, highlights the stark contrast between Neduntheevu’s magical appeal and the harsh realities locals face regarding basic infrastructure and rights. While tourists want to support sustainable growth and prioritise resident needs – fearing a repeat of southern Sri Lanka’s over-tourism – they are often distressed by severe plastic pollution and a lack of recycling facilities. Ultimately, Unsworth emphasises that visitors prefer authentic, responsible experiences over luxury amenities like AC boats and swimming pools, urging that fundamental local needs be addressed before expanding tourism.
One of his biggest challenges is something most tourism businesses take for granted: drinking water. Because Delft’s groundwater is severely affected by salinity, Delft Village Stay has to transport drinking water from across the Jaffna peninsula. The business spends around Rs. 35,000 a month just to bring in enough water to meet the basic requirements of its guests.
The problem extends well beyond the tourism sector. Residents say Delft’s fragile connection with the mainland remains heavily dependent on a small fleet of vessels – two government ferries and one private boat – that are vulnerable to breakdowns, overcrowding and unpredictable schedules.
The consequences can be severe.
Recently, a month-long interruption to regular boat services effectively isolated the island, disrupting the supply of essentials including cooking gas and drinking water.
The island’s tourism ambitions have also exposed the gap between policy aspirations and ground realities.
Government plans to develop Delft as an eco-tourism destination have encouraged a growing flow of visitors, but residents and tourism operators argue that visitor numbers cannot be increased sustainably without first strengthening the island’s basic infrastructure.
The dangers became starkly apparent when an unofficial private boat carrying tourists capsized with 10 people on board. A potentially fatal tragedy was reportedly averted only after local fishermen and Navy personnel rushed to the rescue.
The incident offered a sobering reminder that tourism development in remote locations requires more than branding a destination as an ecological paradise.
For policymakers and development planners looking towards Sri Lanka’s north, Delft offers a clear lesson. Ambitions for zero-emission, community-based and environmentally sustainable tourism cannot move faster than the basic needs of the people who live there.
Reliable maritime transport, expanded water and wastewater management, proper waste disposal and functioning public amenities are not optional extras. They are the foundations upon which any sustainable tourism economy must be built.
The ADB-supported water infrastructure offers a glimpse of what targeted investment can achieve. But Delft’s experience also shows that a single intervention, however important, cannot resolve a much wider infrastructure deficit.
The island may have wild horses, coral walls, ancient ruins and a growing reputation among international travellers.
But before Delft can truly become the eco-tourism showcase policymakers envision, it must first become a place where its residents can reliably secure something as fundamental as water.
“That is the real test of whether the island’s tourism promise can translate into sustainable development – or whether the Lonely Planet image of Delft will remain little more than a façade over the daily hardships of its people,” says Vithushan Arul Ranjan.
Business
Systemic questions linger over NDB fraud inquiry
By Sanath Nanayakkare
The unfolding developments surrounding the massive internal financial irregularity at the National Development Bank PLC (NDB), valued at approximately LKR 13.2 billion, continue to demand rigorous public scrutiny.
As months have passed since the initial disclosure of the fraud in early 2026, questions regarding institutional accountability, regulatory oversight, and corporate governance remain central to discussions concerning the stability and transparency of Sri Lanka’s financial sector.
First coming to light through corporate disclosures and subsequent regulatory reviews, the LKR 13.2 billion incident represents one of the largest internal fraud cases recorded within a major commercial institution in recent times. Because NDB is a systemically important institution – with major state-backed shareholding through entities such as the Employees’ Provident Fund (EPF), the Employees’ Trust Fund (ETF), Sri Lanka Insurance Corporation (SLIC), and the Bank of Ceylon (BOC) – the implications extend far beyond normal corporate missteps.
Public interest advocates and financial analysts have repeatedly emphasised that any major lapse in a bank of this magnitude warrants total transparency to maintain public confidence. Although the Central Bank of Sri Lanka (CBSL) and bank management have publicly assured stakeholders that customer deposits remain secure and day-to-day operations unaffected, the broader governance questions regarding how such significant vulnerabilities went undetected remain a subject of intense public debate.
A focal point of concern among financial analysts and governance watchdogs is the framework surrounding the independent forensic audit commissioned to investigate the transactions.
Entrusted to international expertise via Deloitte Touche Tohmatsu India LLP, the audit’s mandate includes examining the circumstances of the fraudulent operations as well as evaluating historical lapses in internal controls, oversight, and compliance.
However, critics, including public interest figures, have raised questions regarding the timeline for the finalisation and release of these findings.
Parliamentary oversight bodies, such as the Committee on Public Finance (CoPF), have previously engaged with regulatory authorities to review the matter.
Observers point out that timely public access to comprehensive audit findings – without compromising ongoing criminal investigations by entities like the Criminal Investigation Department (CID) – is vital to ensuring that systemic gaps are permanently closed.
The NDB case has also cast a sharp spotlight on broader corporate governance norms in Sri Lanka, bringing elements such as board oversight, the role of external auditors, and potential conflict-of-interest perceptions into sharper focus.
Critics argue that maintaining public trust requires strict adherence to ethical standards at every level of corporate leadership, from commercial bank directors to regulatory supervisors.
“As the country seeks to attract sustainable foreign direct investment, establishing an uncompromised standard of accountability is paramount. For the memory of this financial fraud to serve a constructive purpose, institutional watchdogs, lawmakers, and regulators must ensure that investigations are brought to a transparent, logical, and publicly accountable conclusion, ensuring that public resources and systemic financial integrity are robustly safeguarded,” keen observers of this massive brank fraud say.
Business
‘ASEAN must leverage trust and governance alongside cost competitiveness’
Trust and regulatory clarity are fast becoming ASEAN’s next major competitive advantages, according to Dato’ Sri Vijay Eswaran, Executive Chairman of the QI Group of Companies.
Writing in The Business Times Insights: ASEAN Intelligence 2026, Eswaran noted that while cost competitiveness remains central to the region’s economic appeal, geopolitical uncertainty, shifting supply chains, and rapid technological advancements mean cost is no longer the sole deciding factor for investors. Global companies are increasingly prioritizing stability, predictable policies, and reliable institutions.
Eswaran emphasized that sustainable growth depends on pairing the region’s traditional strengths—such as strategic manufacturing, a growing talent pool, and regional connectivity—with strong institutional governance. Pointing to the OECD’s Asia Capital Markets Report 2026, he highlighted that transparency and institutional maturity are key drivers of investor confidence.
Addressing the rapid integration of artificial intelligence, Eswaran argued that clear guardrails are essential to prevent business hesitation. He commended regional initiatives balancing innovation with oversight, including Malaysia’s AI infrastructure developments, Singapore’s AI Verify framework, Indonesia’s formalization of its National Artificial Intelligence Strategy, the Philippines’ National AI Strategy Roadmap 2.0, and Vietnam’s new risk-based legal framework.
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