Cathay Pacific to benefit from new PRC-UK visa rules

Airline will also benefit from less congestion.

Two new regulatory developments are likely to have a positive impact on Cathay Pacific.

According to a research note from HSBC Global Research, citing a recent report, there will be a planned new tourist visa agreement between mainland China and the UK.

Under this plan, mainland tourists will pay GBP85 for a two-year visa instead of the current price of GBP324. The UK Government is also considering proposals for a 10-year tourist visa, with unlimited multiple visits, just for China.

It was also reported that the mainland is expected to introduce a reciprocal arrangement for British tourists. Hong Kong is the most important gateway from China to the UK and Cathay Pacific flies six flights a day to London and Manchester, therefore, it should be one of the beneficiaries of any pick-up in tourism.

Here's more from HSBC Global Research:

More air route capacity into China. Flightglobal reported (22 October) that Hong Kong's Civil Aviation Department (CAD) has reached an agreement with the Civil Aviation Administration of China to introduce new air routes into the mainland.

At the moment, flights into Eastern China and flights to/from Europe that transit through HK all go through a single congested air route.

From January 2016, there will be additional air routes which should ease congestion (and should help boost aircraft utilization and cut fuel burn).