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China’s aviation regulator could block Cathay Pacific’s brand merger

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It could take a year until airline can be allowed to expand.

SYDNEY: China’s aviation regulator may make it difficult for Hong Kong’s Cathay Pacific Airways Ltd to merge regional arm Cathay Dragon into its main brand because of infractions during last year’s pro-democracy protests, two sources said.

The Cathay Pacific brand flies only to Beijing and Shanghai, while Dragon destinations include smaller cities like Fuzhou and Nanjing. During that period, Cathay’s chief executive resigned and the brand received enough demerit points for minor infractions under the strict CAAC system that the regulator can deny an application to add mainland destinations and aircraft, including Dragon’s, three sources said.

Cathay, which is doing a strategic review amid the collapse in demand related to the coronavirus, declined to comment on its plans for Dragon, its demerit points and its talks with the CAAC.

 

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