Cathay Pacific Airways Ltd. shares jumped to their highest intraday level since June 2020 on Monday morning as Hong Kong Chief Executive Carrie Lam announced that a flight ban on nine countries would be lifted and mandatory quarantine eased to seven days from 14.
The shares rose as much as 4.9% before paring their gain to 0.8% at the midday trading break, still in line for the highest close in a year. They were also the best performers on a Bloomberg gauge of Asia-Pacific airline stocks.
Cathay has been operating a skeleton schedule due to the tight restrictions on travel, including bans on services from key markets such as the U.S., U.K. and Australia as well as most transit traffic. Quarantine rules have also constrained aircrew.
Monday’s rally took the stock’s gain to 22% for this year following slumps of 11% and 29% in 2021 and 2020, respectively.
Cathay said earlier this month that capacity of its passenger operations would remain at about 2% of what it was before the Covid-19 pandemic while flight restrictions stood. Cargo capacity is about a third of pre-virus levels.
Hong Kong’s easing comes months after other places in the region, apart from mainland China, started reopening their borders and adapting policies to live alongside the virus rather than continue pursuing a Covid-Zero approach.
Lam said at Monday’s news conference that the flight ban on nine nations was no longer necessary and would be lifted on April 1, ahead of a previous plan for later in the month. The easing of mandatory quarantine is also a relief for travelers, who faced as long as 21 days in hotel isolation for much of the pandemic.
Cathay has been carrying about 1% of its normal 100,000 daily passengers throughout the Covid crisis.
Hong Kong reported 246 deaths and 14,149 new confirmed infections on Sunday, the lowest daily toll in more than three weeks. Social distancing measures such as restrictions on dining-in at restaurants will be lifted in phases from April 21.
