Hong Kong warns COVID-19 curbs on air cargo to hit goods supply

HONG KONG (Reuters) - Hong Kong will soon feel the negative effects of tougher COVID-19 quarantine curbs on air crew, with cargo traffic and the supply of goods into the city set to drop, Chief Executive Carrie Lam said on Wednesday.

Hong Kong's first transmission of the Omicron variant of the coronavirus was detected at the end of last year after three months of zero infections in the community, prompting authorities to tighten quarantine measures, including on air crew, and reintroduce wide-ranging restrictions on social life.

More than 40 local cases have since been discovered.

Authorities said the outbreak could be traced back to two air crew members of Cathay Pacific Airways (OTC:CPCAY) who broke self-isolation rules. An investigation has been launched into the airline.

The tighter rules prompted Cathay to cancel most of its planned passenger and cargo flights in January. Cathay will operate about 20% of its pre-pandemic cargo capacity and around 2% of its pre-pandemic passenger flight capacity this month.

Lam, speaking at the opening session of the Asian financial hub's new "patriots-only" legislature, said Hong Kong already had the strictest measures against imported coronavirus infections and it was difficult to tighten them further.

"The consequences of these cargo policies will be seen very soon," Lam told legislators. "We almost have no goods entering via cargo flight."

"Destroying this industry will not only affect the flight companies, it will affect every citizen."

Lam said she expected some goods to be unavailable or their price to go up, with food, electronics and medicine among the worst affected.

Returning air crew now need to quarantine for seven days in a hotel, having earlier been asked to isolate at home for three days. Most other residents returning to Hong Kong have to quarantine for 21 days in a designated hotel at their own cost.

On Tuesday, Lam said kindergartens and primary schools must stop face-to-face classes from Friday until after the Lunar New Year at the beginning of February.

She has also ordered a disciplinary investigation into 13 senior government officials who attended a birthday party for a delegate to China's legislature after health officials appealed to Hong Kong people to avoid large gatherings.