Cathay Pacific has warned staff they could be fired if they “support or participate in illegal protests” in Hong Kong, as pressure from Beijing intensifies.
The warning was emailed to staff by chief executive Rupert Hogg on Monday.
On Friday, China ordered the airline to suspend workers who support pro-democracy protests in the territory.
Cathay fired two employees and suspended one pilot over the weekend in response to the order.
Also on Monday, Hong Kong International Airport cancelled more than 100 departing flights, as anti-government protests in its main terminal continued for a fourth day.
Cathay Pacific is now subject to new regulations announced last week by Beijing’s aviation regulator, the Civil Aviation Administration of China (CAAC), which came into effect on Sunday.
These require it to submit lists of staff working on flights going to the mainland or through its airspace.
Any staff member accused of involvement in “illegal protests” is banned from working on those flights. Authorities have warned planes could be prevented from landing if they do not comply.
The regulator has also demanded a report from Cathay by 15 August on planned measures to “strengthen internal control and improve flight safety and security”.
‘We must comply’
In his email to staff, seen by the BBC, Mr Hogg wrote: “Cathay Pacific Group’s operations in mainland China are key to our business.
“We are therefore legally required to follow CAAC regulations and, as is the case with any notices issued by any regulatory authority having jurisdiction over us, we must and will comply.”
Cathay Pacific, Hong Kong’s flagship carrier, has found itself in a difficult position over the long-running pro-democracy demonstrations in the territory, which have angered Beijing.
The email from Mr Hogg followed more violent clashes in Hong Kong on Sunday.
“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,” Mr Hogg wrote.
“These consequences could be serious and may include termination of employment.”
Shares in the Hong-Kong based airline fell more than 4% on Monday.
The statement represents an about-face for Cathay Pacific, which said last week that it would not stop staff joining demonstrations.
However, the airline has come under increasing pressure to change its stance, both from the Chinese government and from a wider backlash on the mainland.
Fuelled by China’s state-run press, a boycott campaign on social media using the hashtag #BoycottCathayPacific has attracted more than 17 million views.
Cathay Pacific cabin crew have also taken to social media to communicate with each other about the authorities’ crackdown, using closed WhatsApp and Facebook groups to share information.
One message seen by the BBC said crews flying into China were now liable to have their phones checked and data read by “safety officers” and advised crew members to leave their usual devices at home.
Last week, the airline said it had seen a fall in bookings for travel to Hong Kong “in the realm of double digits” amid signs that the anti-government protests were discouraging people from travelling to the territory.
Protests in Hong Kong began about nine weeks ago over a proposed extradition bill between the territory and mainland China, and have evolved into demands for greater freedoms.
Hong Kong is part of China, but its citizens have more autonomy than those on the mainland.
It has a free press and judicial independence under the so-called “one country, two systems” approach – freedoms that activists fear are being increasingly eroded.
Cathay Pacific suspended a pilot who has been accused of rioting after allegedly participating in the Hong Kong protests, following a directive from China’s aviation regulator last week.
In a statement, Cathay Pacific said it “wishes to make it clear that we express no view whatsoever on the subject matter of any proceedings to which he may be subject”.
It also terminated two airport ground staff for “misconduct”. No further details were given.