Cathay Pacific, Hong Kong’s de facto flag carrier, pulled a dramatic U-turn over the weekend.
Last week, as Hong Kong endured unprecedented disruption caused by ongoing protests, the airline company told reporters it wouldn’t prevent staff from participating in protests. Then Monday morning, CEO Rupert Hogg sent a memo to staff warning that joining a protest could result in termination for any employee.
“Cathay Pacific Group has a zero tolerance approach to illegal activities. Specifically, in the current context, there will be disciplinary consequences for employees who support or participate in illegal protests,” Hogg wrote. “These consequences could be serious and may include termination of employment.”
The term “illegal protest” is contentious in Hong Kong, where demonstrators have staged regular events over the past ten weeks. As the demonstrations have grown increasingly violent—with protestors, police and gang members clashing in the streets—police have begun denying permits, rendering many of the protests technically illegal.
Hong Kong International Airport has become a popular site for such unofficial protests, with demonstrators crowding the arrivals hall in a bid to spread their message to international travelers. Some airport staff, including members of Cathay Pacific, have participated in such gatherings.
On Monday, thousands of protesters descended upon the airport again, after completing a three day sit-in over the weekend. With crowds clogging roads and access ways to the airport, the Airport Authority grounded all outbound flights at 4 p.m. local time.
Cancellations like that are a direct blow to Cathay’s business, which last week had to cancel over 130 flights as nearly 2,000 staff members took part in a general strike called by protest organizers. The airline has suffered indirectly too as governments around the world issue travel warnings against Hong Kong amid the turmoil.
In its quarterly report last week, Cathay noted that future sales had dropped due to the protests. But at a press conference the day after Cathay’s interim report was released, chairman John Slosar told reporters the company “wouldn’t dream” of telling staff “what they have to think,” implying employees were free to participate in protests.
Evidently, Beijing didn’t approve of the flag carrier’s leniency.
On Friday, a day after Cathay’s press conference, the Civil Aviation Administration of China (CAAC) issued a statement informing Cathay Pacific that staff who had taken part in “illegal protests,” “violent actions” and “overly radical activities” would not be allowed to fly to mainland China.
The CAAC appears to have taken issue with two specific incidents involving Cathay staff. In one, an off-duty pilot was charged with ‘rioting’—another contentious term among protesters—and in a second episode, two staff members leaked the flight schedule of a Hong Kong police football team flying to China. The pilot has been suspended and the two other staffers were sacked.
The CAAC has also demanded that Cathay Pacific provide rosters of all future flight crew for approval, and warned that flights without approved staff members would be banned from China’s airspace. The threat carries significant weight since most of Cathay’s international flights have to travel over China. Cathay Pacific has said it will comply with the demands but some staffers and politicians worry it is the start of a “white terror,” a term broadly applied to perceived political persecution.
Hong Kong lawmaker Jeremy Tam Man-ho told the South China Morning Post, “If the Chinese government can do this to a passenger carrier, then they can do the same to any industry operating on the mainland, be it retail or banking.”
Certainly, Cathay won’t be the last company to kowtow to Beijing.
More must-read stories from Fortune:
—Vietnamese egg coffee is taking North America by storm–but what is it?
—Energy company earnings suffer in the gas glut era
—The U.S.-China trade war is forcing prunes to rebrand as a superfood
—The currency that’s quietly emerged as Asia’s safest bet
—Listen to our audio briefing, Fortune 500 Daily
Catch up with Data Sheet, Fortune‘s daily digest on the business of tech.
