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WASHINGTON (Reuters) – The U.S. Transportation Department (USDOT) warned it could limit flights by carriers based in Hong Kong after the Asian financial hub imposed quarantine rules that have impacted U.S. cargo carrier FedEx Corp (NYSE:FDX).
USDOT issued an order on Tuesday requiring Hong Kong-based Cathay Pacific Airways (OTC:CPCAY) Limited to file flight schedules for all U.S. flights within seven days to determine if any are “contrary to applicable law or adversely affect the public interest.”
Hong Kong in January issued new rules requiring that locally-based air crews observe quarantine when returning to Hong Kong from international locations, but exempted flights between Hong Kong and Anchorage, Alaska’s biggest city.
The USDOT order was issued in reaction to Hong Kong’s quarantine restrictions that exclusively benefit Hong Kong carriers and “impaired the operating rights of U.S. carriers,” USDOT said.
While FedEx’s Hong Kong-based crews serve only intra-Asia routings and therefore do not benefit from the Anchorage exception, USDOT said, Hong Kong carrier Cathay Pacific operates a large transshipment operation at Anchorage.
“This carve out effectively provides Cathay Pacific with the ability to continue those operations without impact from the new crew quarantine requirements,” said USDOT.
Cathay Pacific did not immediately comment. The order also applies to Hong Kong Airlines and Hong Kong Express, but they are not currently operating U.S. flights.
As a result of the quarantine rules, FedEx is incurring “significant operational costs and personal burden on its Hong Kong crewmembers,” the Transportation Department said.
It said FedEx had temporarily relocated its Hong Kong-based crews to San Francisco “in order to maintain the viability of critical operations in its intra-Asia network.”
On Tuesday, a FedEx spokesman said it hoped the USDOT order “will aid in resolving this matter” and added it was working with U.S. and Hong Kong authorities and the Air Line Pilots Association “to address Hong Kong’s entry and quarantine requirements for locally-based crew members.”
In a previously unreported Feb. 26 letter, USDOT urged Hong Kong authorities “to restore the level playing field in the U.S.-Hong Kong market; otherwise, the department may have no choice but to consider regulatory action.”
