David Fickling, Columnist

Cathay's China Crisis

The Hong Kong airline can't remain aloof from the market share war taking place over the border.

October 13, 2016 at 4:36 AM UTC

David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.

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Hong Kong's political activists aren't the only ones who fear the long arm of the Chinese state these days. Airlines are getting in on the act too.

Shares in Cathay Pacific fell as much as 5.6 percent to their lowest level in seven years Thursday after the company junked its forecast for second-half profit and said it was carrying out a "critical review" of its business. Blame competition from over the border.

Mainland China's big three state-owned airlines have been adding planes and routes at a rapid clip in recent years. Along with HNA-controlled Hainan Airlines, they've been chasing a domestic market that Airbus forecasts will grow almost fourfold between 2015 and 2035 and an international one that has already turned China into the world's biggest exporter of tourists.