Hong Kong Airlines President Yang Jianhong reportedly stated Grand China Airlines, parent of Hainan Airlines, and Hong Kong Airlines, 45% controlled by Hainan Airlines, plan to raise a combined HKD15 billion (USD1.9 billion) in an IPO in Hong Kong in 2011 (South China Morning Post/Reuters/Shanghai Daily, 23-Nov-2010). Grand China Airlines reportedly plans to raise more than HKD10 billion (USD1.3 billion) in 1H2010 while Hong Kong Airlines is selecting underwriters for a planned HKD5 billion (USD644 million) IPO in 3Q2011. Mr Yang stated the application for Hong Kong Airlines to list as a "red chip" or overseas registered Chinese company, had been approved by the State Council. Grand China, which postponed a share sale plan two years ago due to the global economic crisis, is also the parent of China Xinhua Airlines, Shanxi Airlines and Changan Airlines. Hong Kong Airlines, which operates a fleet of 18 aircraft, plans to use the proceeds of its IPO to fund aircraft acquisitions with 33 widebody Airbus aircraft on order.
Hong Kong Airlines and Grand China Airlines plan USD1.9bn IPO
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Having built a regional Asian network anchored around mainland China as a source market, HNA Group's Hong Kong Airlines is leveraging its hub capability from short/medium haul connections to long haul transfers, which also reduce CASK. Hong Kong Airlines resumed long haul flying in early 2016 with a service to Cairns and the Gold Coast. Auckland will be added from Nov-2016 and Hong Kong Airlines should be able to break up the Air New Zealand-Cathay Pacific joint venture on the route.
Hong Kong Airlines is restricted from serving major Australian cities due to bilateral limits (Australia and Hong Kong have not been able to agree on increased capacity levels). Hong Kong Airlines' owner HNA has bought into Virgin Australia, which plans to serve the key HNA hubs of Beijing and Hong Kong in 2017, providing access from major Australian cities. Virgin could also help Hong Kong Airlines make viable service to smaller Australian cities.
Hong Kong Airlines is receiving a lift in Australia and New Zealand bookings, attributed to Asian consumers shifting away from travel in Europe, which has repeatedly been impacted by terrorist acts. Hong Kong Airlines believes that passengers are "viewing Australia and New Zealand together as more of a safe-haven status destination".
HK Express receives first A321 and awaits A320neo as Hong Kong's LCC rate grows to 10 percent
HK Express continues to work towards its goal of ending 2018 with 50 aircraft. HK Express will end 2016 with 18 aircraft, including its first A321s and A320neo. The A321s provide additional capacity per movement – important to bring costs down, but also to grow where traffic and slots (at Hong Kong and abroad) do not permit.
Asian LCCs are increasingly gravitating to larger aircraft to try to overcome insufficient infrastructure. Larger narrowbodies at LCCs gained wide awareness with AirAsia's A321 order, although many other LCCs will operate larger types before AirAsia receives its first A321. The A320neo brings additional range, besides the usual efficiency improvements.
HK Express plans to end 2017 with 32 aircraft. Even if sustainable markets can be found, this is rapid growth for an opaque slot system at Hong Kong International Airport. HK Express' continued growth will further boost the share of seats that LCCs operate at Hong Kong. LCCs account for 10% of capacity at Hong Kong in 2016 – up from 5% in 2012. The gains have mostly been earned due to HK Express. With as much success as HK Express claims, it might now be time for the LCC to open its books and present transparent financial reports.