Cathay Pacific May Leave oneworld, Be Acquired By Air China

Air China, which currently owns 30% of Cathay Pacific, is considering taking control of the Hong Kong-based airline. The Chinese flag carrier and Star Alliance member could cause a realignment of global airline alliances, moving Cathay from oneworld (American Airlines, British Airways) over to Star (United, Air Canada).

  • There’s been speculation for some time about Cathay Pacific jumping to Star Alliance and being replaced by China Southern which is part-owned by both American Airlines and Qatar Airways. (Qatar owns a 10% stake in Cathay Pacific as well.)

  • Talks on the status of China Southern were delayed by the pandemic, and American wrote down the value of its investment by a quarter even before that.

Cathay Pacific First Class

Historically, Cathay Pacific was both a top quality airline and a fantastic source of award availability for oneworld frequent flyers. Their top Wing and Pier lounges in Hong Kong also both admit oneworld emerald frequent flyers to their first class sections. A move to Star Alliance would not similarly welcome Star Alliance Gold members.

The Pier First Class Lounge, Hong Kong

In recent times award space on Cathay Pacific has been very difficult to get, as the airline has ramped service back up gradually. It has also been heavily focused on connecting traffic between Hong Kong and China.

And Hong Kong, of course, has suffered as a destination not just due to pandemic restrictions but civil liberties restrictions as well following mainland China’s national security crackdown in 2019 and abrogation of its commitment to rule of law for Hong Kong contained in the 1984 Sino-British Joint Declaration.

Tell me you can watch this without tearing up.

“Do You hear the people sing,” by the way, is banned in China.

It was at the same time that mainland China began its crackdown on Hong Kong – damaging its role as a world financial center – that it forced out the CEO of Cathay Pacific. There had been recent talk of deeper ties between Cathay Pacific and American Airlines but American and Cathey face limits even on codesharing due to ongoing restrictions on Russian overflight stemming from Russia’s invasion of Ukraine.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Wow, that will be a huge disappointment and that means end of any flights on CX for me. I’m speaking as a HKer. I will never not step foot on any mainland Chinese owned carrier.

  2. @Al: Do you apply that philosophy to everything else that benefits mainland China? Easy enough to dodge TikTok, but so much is built there… especially if you’re in HK.

    This is great for me as a UA flyer with Malaysia as an occasional destination. Previously I had to book end-on-end tickets across two alliances to get there.

  3. Four years ago this would be devastating news (for me, as a oneworld Emerald who used to fly CX a lot before the pandemic), but CX’s network and inflight service are a shadow of what they used to be.

    Perhaps this would clear the way for Starlux to join oneworld.

  4. @Christopher – with SIN an original Star hub and SIN-KUL having 6 carriers offering constant cheap service on a one hour hop, including SQ itself, I can’t imagine going via HKG is going to be much more convenient, esp given the thin and expensive HKG service from UA and others post COVID.

  5. I think service will be worse under Air China than Cathay. I know it is not what it use to be but still Cathay is better than Air China. I will miss it if it changes name. With HK in Star Alliance, there would be no need for UA to fly to HK but would make AA fly to HK more.

  6. My last CX award ticket was last august BOS-HKG-SGN. Made the reservation 9 months before. Haven’t seen a single business award seat since then out of BOS or JFK so no real loss at this point.

  7. Utilized Cathay on my recent trip to the far east. Their long lounge in Hong Kong was very comfortable and their service both in economy, and in business class was outstanding even in economy my wife recognized with early food, service and extra drinks and so forth. I am one world emerald. It be a shame if Cathay Pacific drops out of one world and joins United star alliance.

  8. @Greg: Service on *A from HKG to KUL has always been slim, so slim that I would buy a Malaysian Airlines ticket from HKG to KUL.

    Flying to SIN to double-back to KUL seemed more trouble than I thought it worth (although I did it once just to tack on the Singapore visit, and did the same for Tokyo).

    A lot of this was also back when UA wasn’t flying to SIN, so a SWU would cover me to HKG and just leave the 3 hours on the HKG-KUL MY flight, while connecting in Tokyo would leave me another 6 hours in Y.

  9. Have seen very little award availability on CX. Even when seats did exist, devalued miles plus high fees made the cost of economy awards too expensive.

  10. My dream is to add in StarLux to oneworld! I have been to the Pier and the Wing and they are really lovely but I am boycotting Hong Kong now for other Asian destinations. I used to go to Hong Kong annually using AA SWUs. Political freedom and upgrades on cheap economy fares – those were the days!

  11. has been expected for years.
    They are still a decent airline – was just on multiple flights on them – but many of their customers don’t think so.
    AA knew it which is why they weren’t willing to try to make HKG work again.

  12. @Tim Dunn
    May I ask where your evidence is?
    How do you know CX is the reason why AA is not trying HKG again?

    I personally believe CZ is better than CX, and will benefit OW more.

  13. @Christopher Raehl is apparently upset that some people in this world aren’t without morals and stand by their convictions

  14. For me, it isn’t a big deal whether CX is in OW or Star Alliance, because the redemption sweet spot using AS miles is about to go away anyway (and Aeroplan’s stopover rules are nearly as good).

  15. Who know what’ll happen if Air China take a controlling stake in Cathay… they may just decide it’s better for the airline to stay in Oneworld. We’ll just have to wait and see what happens.

  16. This makes sense. Hong Kong has lost its appeal as a special destination. If you are going to fly that far, why not visit real Chinese cities or go to Japan instead.

    For all the talk of China cracking down on Hong Kong, let’s remind ourselves what the U.S. government has done to Assange, Europe has done with criminalizing speech and expression, and weren’t bakers bankrupted by the government for not baking a cake against their religious beliefs. China spies on its citizens and blocks internet access but the U.S. government does the same and didn’t Europe start censoring what doesn’t align with the EU views.

  17. No more First Class lounges and great amenities for OW Emerald in HK with CX. SA Gold is not the same. Just look over to SQ in their lounges. Status holder flying cheap tickets get Kris Flyer Gold lounge. Yup, transit in HK as long as you have the chance. The party will be over soon.

  18. I have never flown on Cathay Pacific due to not finding the right combination of price including two checked bags and schedule. I have flown on Air China from PNH to PEK and PEK to LAX. The flight was fine and the service was also fine. The half day layover was long but I got a transit entry stamp to exit the airport for a hotel outside so I could see just a bit of China.

  19. Just flew CX to SIngapore two weeks ago, the experience and the lounges were excellent. If CX leaves the OW Alliance, there will effectively be only one airline with exposure to Aisa, which of course would be JAL. Both China Southern and Malaysia Airlines are awful (and arguably a safety concern), it’s hard to imagine a credible alliance only having one airline service Asia.

  20. Derek,
    again, this has been rumored for years. AA mgmt had to know the risks of losing CX and the relationship is not even a joint venture. AA has to compete with CX for the local market. CX helps AA fill connecting flights.
    UA has been stronger to Hong Kong and is adding flights from the west coast because it can’t fly them from the East Coast due to the Russia airspace embargo.
    And the number of CX aircraft on the ground at HKG was stunning – and I was through the airport 3 times. It is also not a surprise or a secret that CX’s capacity is down considerably. There simply isn’t the demand there once was and CX can’t staff its full fleet.

  21. @Tim,
    CX and AA can’t have a joint venture because of the lack of open skies in China. In many ways a merger between Air China and Cathay Pacific makes sense, especially given Hong Kong’s recent political and economic situation.

  22. I just got back to JAX from several trips on CX, ORD-HKG, HKG-BKK, WUH-HKG. Trips were uneventful. Extra effort for Emeralds was evident when I flew economy, pillow, blanket, special meal service. Wing and Pier First lounges were superb for dining, but fewer customers.
    Almost everything was as before pandemic with the exception of staffing, as already noted. My long-haul HKG-ORD return had several very green attendants in business class without the usual graciousness and priority for the customer. More like American.

  23. Doug Parker’s legacy at AA seems to continue with the next generation of equally minded incompetent … (choose your own noun).
    After losing the best airline in South America and letting Delta encroach on their most profitable hub, they seem to be committed to dismantling Oneworld entirely.
    You can say losing CX is out of their control, but do you think they will make any effort whatsoever to try to get Air China to join Oneworld?
    This management treats their customers, employees and investors equally poorly. Complete lack of effort of cabin crews is totally reflective of AA (lack of) management capabilities.
    We all knew this would happen the very second USAir took over. Every single step they did since was to completely degrade our travel experience. They used to have the best reservation reps (until they closed Tulsa reservations center – all of you who had a chance to interact with them will know what I am talking about), best redemption options (LAN, CX, JAL etc), Premium lounges (MIA, LAX) – and all of that is gone. I made a mistake last week and paid for a couple of first class flights, only to cancel my flights back and flew on Alaska. I always liked them and though they were more expensive – it was totally worthwhile.
    On a side note – I was so impressed by they N-gates lounge and staff. I would definitely say – best lounge overall in North America.

  24. China would turn CX into another version of China Eastern, western, northern or whatever. Abysmal service and would be the ruination of a great brand.
    I don’t see anyone lining up to fly Air China or whatever the other variants are known.

  25. Ghost,
    no disagreement.
    Just noting that AA could see the changes coming and it isn’t worth risking putting their own metal into HKG with the chance – and perhaps more than a little one- that CX will end up in another alliance and AA might even lose the ability to connect passengers to CX.

    It is also not a given that the US would allow even a basic partnership between CX and UA if UA remains the only US carrier serving HKG.

  26. AA’s investment in CZ was an overreaction to DL’s investment in MU. There was little synergy. Despite DL’s investment in MU, there isn’t much synergy between those two either. With DL’s tighter relationship with KE, I can’t imagine MU is happy with its role and membership in OW. Shanghai-based MU would be a much better partner than CZ for AA, and OW in general. We may see some shuffling in all three alliances.

  27. As a UA FF, I welcome another partner.

    As for the rest of your off topic article, I tear up for the people that missed their flights because of the pathetic distributions. They say they want to be like the US. They’d all be in jail if they tried some of the stuff they got away with over there in the US.
    Let’s not forget, this all really started because the govt wanted a way for Taiwan to extradite a HK guy that, on a trip to Taiwan, murdered his HK pregnant girlfriend, dumped her body in some bushes, stole all her stuff, and drained her bank account. He apparently offered to surrender himself to Taiwan but it was rejected because they didn’t want to risk making China look good. The law itself would only be applicable to severe crimes based on the HK system. I guess none of the rioting “students” had time to actually read the proposed law. I tear up for the girlfriend’s family.
    Anyways I think it’s better to gradually merge the govt laws than suddenly change everything in 2047.
    After all this, is anything actually better for anyone?

  28. Well, that is annoying.

    If Cathay is replaced by China Southern, will international-international transit at Guangzhou Baiyun Airport (CAN) be as smooth as at HKG? And are the lounges anywhere as nice as CX?

    I am not seeing regular service on China Southern fr/to JFK, which is mighty inconvenient. And long overnite layovers at CAN when headed to MNL or BKK. And not seeing nearly as many connections on China Southern to non-China destinations in Asia. Unless all that changes, I will skip flights on CZ.

    I will miss the CX lounges when flying on other OW carriers. And, I will miss very very much the Pier First. What a treat after landing in HKG at 5 AM!

    Such horrid First World problems we have . . . .

  29. Well not great as my Singapore credit card only redeems to Singapore airlines or Cathay. Wonder if that would move to two Star airlines

  30. A bunch of people here taking things political when it doesn’t have to. If China wanted to control CX they’d do it during COVID when the HK government bail CX out of bankruptcy, why buy them now that they’re back on their feet and almost paid off their debt? Also, CX owns a very similar 22.8% in Air China as well, if Air China were to acquire CX they’d have to buy back the 22.8% + a majority stake from Swire, this makes no economical sense. Also note that although AA has veto rights, CX is still a founding member of Oneworld with the same veto rights, with good relationships with QR, BA, QF and more… they even sponsored Srilankan and Fiji to join the alliance. CX’s presence is deeply rooted in the alliance it causes more harm to leave than stay, OW also prides themselves as a premium alliance so I can’t imagine them thinking CZ is a better addition than CX. Star already has Thai, SQ, Eva and ANA in the region, I can’t imagine all of these airlines welcoming CX with open arms.

  31. It matters little to me. It is very unlikely that I will ever visit HK again, the place where I grew up.

  32. Oneworld with China Southern would be much stronger and yes, then a Starlux could join as well. Hong Kong and Cathay aren’t what they were and will never be again. Time for a change.

  33. I hope that Philippine Airlines will join Oneworld – the 2nd ASEAN carrier to join after Malaysia Airlines

  34. I hope that Philippine Airlines will join Oneworld – the 2nd ASEAN carrier to join after Malaysia Airlines

  35. Outside of taking a bigger stake in Cathay there really is no reason for Cathay to leave to join STAR but who is to say that the combined airChina/Cathay link up wouldn’t be better suited for ONEWORLD? Nothing lasts forever and we have certainly seen that happen with Hong Kong itself. If airChina thinks owning and operating Cathay as a Premium Airline is the way to go several things could be set in motion…..China Southern officially joins OW, STARLUX also comes to OW and possibly Singapore Airlines leaves STAR due to chasing similar customer profiles. Both Cathay and Singapore are founding Members of their respective Alliances and nothing is holding any of them back since none of them are involved in Joint Ventures. Realistically how many Asian partners does STAR need before it becomes oversaturation. STAR is the biggest but it SAH isn’t the best across the board.

  36. I highly doubt Cathay Pacific would leave OW. Maybe this “acquisition” would allow more Asian carriers into OW, ie: China Southern, Philippines Air, Starbucks, but no reason for them to leave. Also, CX sponsored SriLankan and Fiji to come into OW, plus was recently mentioned that they were also sponsoring MIAT Mongolian into the alliance.

  37. Looks like OW just scored that first new Asia airline, but it’s a very small player: Fiji Airlines. They’ll get you from LAX to Nadi and most of Australia, but that’s about it. OW is going to need a much bigger fish.

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