Hong Kong cancelled all flights on Monday due to massive protests that have taken over the airport. Now it is bracing for a ripple-effect of economic pain.
- Hong Kong International Airport cancelled all remaining flights into and out of the city on Monday afternoon as protesters occupied the arrival and departure halls for the fourth consecutive day.
- The airport contributes about 5% of the city's GDP directly and indirectly, but the long-term impact of the airport closure could be more severe.
- Hong Kong airline Cathay Pacific's shares fell 4.9% on Monday to a 10-year low.
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Hong Kong authorities cancelled all flights into and out of the city's major international airport on Monday as protesters occupied the arrival and the departure halls.
While protests against actions by mainland China have rocked Hong Kong for weeks, thousands of demonstrators have filled the airport over the past four consecutive days, protesting the Chinese government and Hong Kong police's handing of the rallies.About 200 flights were cancelled altogether, including the rest of the day's departures and arriving flights not already in the air. The airport typically handles an average of more than 1,100 flights each day, according to the airport authority. More than 74 million passengers traveled to and from the airport in 2018.
"Airport operations at Hong Kong International Airport have been seriously disrupted as a result of the public assembly at the airport today," authorities said in a statement sent to Business Insider, issued at 3:30 p.m. local time.
"Other than the departure flights that have completed the check-in process and the arrival flights that are already heading to Hong Kong, all other flights have been cancelled for the rest of today," the statement added.
The airport closure was unwelcome news for companies operating in the city, which is a global financial hub. While protests have already had a notable effect on the city's economy, according to CNN, the closure of the region's third-busiest airport - behind Beijing and Tokyo - had the potential to cause a more direct and severe impact, particularly if similar closures continue to occur.
The airport and related services contribute 5% of Hong Kong's GDP both directly and indirectly, Hong Kong's transport secretary, Frank Chan, said earlier this year.Hong Kong airline Cathay Pacific's stock fell 4.9% on Monday, hitting its lowest point in 10 years. China demanded that the airline prevent protesting employees from working flights to or transiting through the mainland, and the airline warned that it would fire staff taking part in the protests.
"This is a disaster for Hong Kong that will cost tens of millions of dollars," Geoffrey Thomas, editor-in-chief of AirlineRatings.com, told CNN. "Travelers for months to come will cancel and rebook with other airlines to avoid Hong Kong as a hub."
Hong Kong is a major base for a variety of global corporations and banks. The city, a special administrative region of China, exists semi-autonomously while maintaining close ties to the mainland, making it an attractive hub for companies seeking a foothold in Chinese and Asian markets.
The CEO of BEA Union Investment Management, Eleanor Wan, told CNN that although it's still too early to assess the overall economic impact of the airport shutdown, the "negative" psychological impact will linger.
"I'm afraid there will be even fewer visitors coming and fewer hotel bookings," she said. She pointed out that several countries have already issued travel warnings for the city.