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October 06, 2022

The Morning Rant: Minimalist Edition


I don't particularly care about the health of the world's airlines, in particular Virgin Atlantic, whose recent ad is absolutely puke-worthy. Seats on planes are commodities, and small variations in service are trivial in comparison to the overall misery of flying nowadays. And in my experience airlines lie more than most other businesses. The closest hub to my home is United's Newark facility, so I use them for most of my flying. Their smug pride in their "cleanliness" procedures in the wake of the Wuhan Flu debacle is ridiculous. Passing 20 signs on the jetway touting their amazing procedures, then finding detritus from the last several passengers on and around the seat is a hint that maybe it's just a publicity effort.

But there is one thing the industry is useful for, and that is economic signaling. They enter markets when they expect growth, and will fight for every single flight slot. And when they expect economic malaise they run for the hills.

Virgin Atlantic Scraps UK Flights to Hong Kong, Closes Office and Services

Virgin Atlantic announced on Oct. 5 that it’s permanently pulling out of Hong Kong, dropping flights to the Asian hub and shuttering its offices after 30 years.

The UK company cited a string of factors as reasons behind the decision, including issues arising from Russia’s ongoing war in Ukraine.

“After careful consideration, we’ve taken the difficult decision to suspend our London Heathrow to Hong Kong services and close our Hong Kong office, after almost 30 years of proudly serving this Asian hub city,” an airline spokesperson said in a statement.

The airline stated that “ongoing Russian airspace closure,” which would have resulted in Heathrow to Hong Kong flight times being extended by between one and two hours, had also played a part in its decision.

If there was money to be made on the Hong Kong route they would have stayed, especially since a fair amount of that travel is the hugely profitable business seat, which can be several orders of magnitude more expensive than an economy ticket. That they are leaving a prestigious route is a clear signal that the expectation of future profit is unclear. And that signals their opinion of the business climate in Hong Kong. They can blame Covid and Putin's Ukraine adventure all they want, but the reality is stark.

What is fascinating about the gradual destruction of Hong Kong as a world business center at the hands of the communist dictators in Peking is that they are willing to forego tens of billions in capital inflows as long as they get their political way, which is to turn Hong Kong into just another Chinese business center. And that means cracking down hard on the freedoms that Hong Kong has enjoyed ever since Great Britain took it during the first opium war.

A more enlightened communist government would have allowed Hong Kong its freedoms and reaped the huge profits (with its attendant graft) available. But the Chinese communist mindset is consumed by image, and they simply cannot abide freedom and individualism anywhere in their world.

That of course is their loss, but it is the West's loss too. Hong Kong was a beacon of relative freedom in an ocean of totalitarian excess, and it has been destroyed.

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posted by CBD at 11:00 AM

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