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- IATA Code
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- L4 Dragonair House
Hong Kong SAR, China
- Main hub
- Hong Kong International Airport
- Hong Kong
- Business model
- Full Service Carrier
- Joined Alliance
- Association Membership
- Codeshare Partners
- Air China
Royal Brunei Airlines
Based in Hong Kong, Dragonair is a wholly owned subsidiary of Cathay Pacific and the second largest airline based in Hong Kong. Dragonair’s network includes services to China as well as central and south east Asia. Dragonair is an affiliate member of the oneworld alliance.
Location of Dragonair main hub (Hong Kong International Airport)
447 total articles
66 total articles
Cathay Pacific says it is pleased with its seat discount programme “fanfares” that turned a year old in Oct-2013, having sold about 140,000 seats during that time. But this is an exceptionally small figure: it accounts for less than half a percent of Cathay’s 2012 traffic. In comparison, AirAsia sells 140,000 seats every two days.
But strategically "fanfares" is important, and not just because it enables Cathay to clear inventory likely to go unsold. Cathay sees fanfares giving it greater relevance in the budget market, now in the limelight due to Hong Kong Express and Jetstar Hong Kong.
Fanfares, with its colourful and sometimes wacky marketing, is a brand stretch for typically reserved Cathay. Despite this, Cathay wants to expand the offering, in line with its view towards LCCs that the cheapest seats are the remaining unsold ones. But load factors are already high on the flights budget-conscious passengers want, giving doubt to this strategy.
Asian carriers continue to pour additional capacity into Myanmar, building on increases which were initially pursued in 2H2012 after the market quickly opened as economic sanctions which had been in place for two decades were lifted. The Myanmar international market will exceed 110,000 weekly international seats in Jan-2014, representing an increase of about 40% compared to Jan-2012 and almost 130% compared to Apr-2012, when Aung San Suu Kyi’s National League for Democracy won landmark elections.
But so far the additional capacity has outstripped demand. International passenger traffic in Myanmar has grown by about 70% over the past two years – an impressive figure but not sufficient to keep up with the capacity increases. As a result load factors to and from Myanmar are significantly below the global average.
Nearly all of the 14 foreign carriers which were already serving Myanmar before Apr-2012 have seen load factors on their Myanmar routes drop over the last year. The nine foreign carriers which have launched and retained services to Myanmar since the market opened have also so far recorded lower than normal load factors – generally in the 50% to 70% range.
Hong Kong will welcome its first home based low-cost carrier on 27-Oct-2013 when Hong Kong Express re-launches as a LCC and over the next few weeks serves eight cities in China, Japan, Malaysia, Taiwan and Thailand. The transformation of the HNA-backed carrier occurred in a speedy five months. At first blush that may seem insignificant, but Hong Kong Express had been highly integrated with sister carrier Hong Kong Airlines. Those ties were largely cut as Hong Kong Express defined its own route network and handled its own distribution, marketing and staffing while re-configuring its fleet.
The tight timeframe meant Hong Kong Express had to forgo some strategic decisions. Implementing those while pursuing growth will now largely comprise the carrier's plans for the rest of 2013 and much of 2014. The carrier plans to introduce a new booking platform to provide a more robust offering from connections to ancillary revenue options.
Hong Kong Express will undergo a re-branding exercise, likely re-naming itself "HK Express". Much more prominent in the public domain, Hong Kong Express plans to more than double its destinations by northern summer 2014. More Chinese cities will be brought online as the carrier has the scale to absorb operational factors in China that are not conducive to efficiency.
The low-cost carrier focus in Hong Kong is firmly on Jetstar Hong Kong's effort to secure a licence, but much more quietly Hong Kong Express is preparing to re-launch as a LCC on 27-Oct-2013. Hong Kong Express will become Hong Kong's first LCC, and nearly two years after Hong Kong Express first mooted adopting the LCC model.
Its initial network will comprise mainland Chinese as well as Northeast and Southeast Asian destinations, a medley of new cities, previously served ones and actively served ones. Competition will range from light to heavy as it faces formidable full-service and low-cost carriers. Hong Kong Express plans to fly 1.5 million passengers in its first year and have a fleet of 30 A320s by 2018.
Hong Kong Express is clearly not an AirAsia or Jetstar. Its ancillary offering is light and other structural differences, like IT, will make it less robust. This is partially to be expected as it does not have an experienced LCC group to piggyback on, but its launch has hints of being under-whelming compared to what Peach or Scoot achieved.
Asia's aviation axis has shifted from Singapore Airlines (SIA) to Cathay Pacific as the region undergoes both cyclical and structural change. SIA is more exposed than Cathay to the weak economies of Europe while Cathay can more effectively serve North America, currently a strong market. Cathay's Hong Kong hub is far better suited to capturing Chinese growth than is Changi, and Hong Kong's more northerly location than Singapore means diversions through the Middle East on Gulf carriers are less of a threat than at SIA.
Cathay's decision to offer premium economy – which SIA is still hesitant to do – is bearing fruit. SIA however has made more significant and bolder change than Cathay, embarking on new partnerships and launching long-haul LCC Scoot. These will take time to mature – Scoot especially.
These factors are unlikely to change in the short term, but the long term contains much greater uncertainty. The possibilities of deep partnerships, acquisition, consolidation, changes in bilaterals or a surge in growth out of India and Indonesia, to name but a few, could potentially re-balance not only SIA and Cathay, but all of Asian – and probably global – aviation. This report looks at where Cathay and SIA compare today and what the future may hold as they pursue different strategies.
After nearly three years of undistinguished growth, Cathay Pacific’s incoming CEO Ivan Chu will have an opportunity – and probably be forced – to plan the carrier’s future in an environment that is becoming more competitive than ever. Cathay has lagged on major strategic decisions, adopting a style that was very effective in the past, but less appropriate to a dynamically changing environment. This challenge must now be faced by Mr Chu.
Greater and more clearly defined partnerships, a low-cost strategy, and the future of freight and fleet planning are some of the topics facing Mr Chu, whose appointment was announced on the evening of Friday 16-Aug-2013. This was part of a shuffle that sees current CEO John Slosar moving to the chairman position at Cathay and other Swire companies.
Mr Slosar will have held the reins at Cathay for only three years. Mr Chu, after working his way up through a distinguished career in the airline meanwhile becomes only the carrier’s second Chinese CEO in its nearly 70-year history. He is currently COO of the airline, which has become a standard stepping stone to the top job in Cathay's structured succession process.
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