Sources familiar with the situation said the announcement had pre-empted a plan by some lawmakers to call for Cathay to restart the Saudi route, which was axed in March 2017.

“When the government is in need of expanding into the Middle East, our flag carrier has the right to operate the route but doesn’t offer direct services to Riyadh,” one source said.

The source added that the government’s delegation led by Chief Executive John Lee Ka-chiu had to take indirect flights last year, which was not conducive to business.

The news came as lawmaker Jeffrey Lam Kin-fung, also a member of the government’s key decision-making Executive Council, called for Cathay to offer perks to the public after it posted a massive profit for its last financial year.

“The government rescued Cathay with public money to ride out the difficulties during the coronavirus pandemic,” Lam said

Authorities mounted a multibillion-dollar bailout to help tide the company over the coronavirus crisis, which hit the global travel industry hard.

“Now that the firm is making massive profits, shouldn’t Hong Kong residents be given some concessions such as in the form of ticket discounts or rebates, as they really had a hard time during Covid-19?” Lam asked. “It should give back to the community.”

Hong Kong government hits out at Cathay over 786 flight cancellations in 2 months

The profit was Cathay’s highest since 2010, when the figure hit HK$14 billion.

Preference shares worth HK$19.5 billion were issued to the government as part of the recapitalisation deal agreed during the pandemic.

Cathay bought back half of the shares for HK$9.75 billion last December and said it planned to acquire the remainder by the end of July.

Cathay last week said it had learned a lesson from recent flight cancellations, pushing back its target for restoring pre-pandemic capacity to early 2025.

But customers have grumbled about fare prices and pointed to the string of recent flight cuts around peak holiday periods as a sign of a decline in service quality.

Cathay cancelled 786 flights between last December and February – more than 4 per cent of its total operations.

It said the cancellations were designed to maintain smooth services over the Lunar New Year holiday in early February.

The airline’s figures for February showed it carried 1.8 million passengers, up 61.6 per cent, year on year and 107,039 tonnes of cargo, a 3 per cent increase.

The company attributed the flight cancellations to factors such as internal planning failures and an underestimation of pilot reserve levels and pledged to prevent disruptions over the Easter holiday amid government criticism.

The city’s tourism sector recovered more slowly than the government expected in 2023, with flight capacity limitations a factor.

Tourism legislator Perry Yiu Pak-leung appealed to Cathay to offer more deals to travel agents, such as promotional airfare packages through partnerships with hotels.

“We hope the airline can provide more perks and promotions for travel agents to facilitate the tourism industry’s recovery,” Yiu said.

“Cathay should undertake the mission of collaborating with travel agents and hotels to roll out promotional packages or group tickets to attract inbound overseas travellers to Hong Kong.”

Timothy Chui Ting-pong, executive director of the Tourism Association agreed and said the move could help travel agents attract group tours and also benefit Hongkongers who left the city for holidays.

“This could help boost the business of travel agents as part of the recovery of the tourism industry,” he added.

“But the most important thing is for Cathay to restore the flight capacity by hiring sufficient aircrew in a bid to consolidate the aviation industry’s reputation.”

Law Cheung-kwok, senior adviser for the Aviation Research and Policy Centre at the Chinese University of Hong Kong, said Cathay should lower its fares as its ticket prices were more expensive than other airlines.

Hong Kong’s Cathay ‘learns lesson’, pushes back capacity target by 3 months

“One of the reasons behind Cathay’s massive profits is its expensive airfares,” he said.

“Therefore Hongkongers and visitors expect that its ticket prices will go down to a reasonable level.

“Cheaper airfare could be affordable for more visitors and would help revive the city’s aviation industry. With hefty profits last year, there is room for Cathay to lower its ticket prices.”

But Regina Ip Lau Suk-yee, the Exco convenor, argued that Cathay should fulfil its social responsibility with a faster pace of recovery, rather than handing out discounts.

“Cathay has other ways to fulfil its social responsibility,” she said. “Recovery of our aviation sector hinges on both the Airport Authority and Cathay resolving the manpower shortage problem.

“The government has a responsibility to cure its deficits and should not rely on ‘sweeteners’ from a private corporation to keep people happy.

“Over-reliance on sweeteners to placate the public undermines the government’s commitment to fiscal prudence.”

Election Committee lawmaker Andrew Lam Siu-lo added the best way for the company to give back to the community was to strengthen its competitiveness through improvements in areas such as flight capacity and staffing levels.

“The primary responsibility of Cathay is to rebuild the aviation industry’s reputation by improving its service quality,” he said.

Lam added airfare promotions were just “gimmicks” and maintained it was more important for the airline to recapture its “glory”.