Hong Kong Airlines
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- IATA Code
- ICAO Code
- Corporate Address
- L2 CNAC House, 12 Tung Fai Road Hong Kong International Airport
Hong Kong SAR, China
- Main hub
- Hong Kong International Airport
- Hong Kong
- Business model
- Full Service Carrier
- Association Membership
- Codeshare Partners
- China Eastern Airlines
Hong Kong Express
Hong Kong Airlines is an airline based at Hong Kong International Airport and the sister carrier of all-cargo airline Hong Kong Express Airways Ltd. Establised in 2006, the airline operates services within Asia and long-haul destinations in Europe. China's Hainan Airlines is a major shareholder. Hong Kong Airlines has aggressive growth plans, with a large order book of Airbus A320 and Airbus A350 aircraft.
Location of Hong Kong Airlines main hub (Hong Kong International Airport)
334 total articles
Hong Kong Airlines to focus fleet plan on A330/A320 fleet, take cautious approach to long-haul route
35 total articles
As Jetstar Hong Kong prepares to launch, Hong Kong Airlines weighs transforming Hong Kong Express into an LCC, Spring Airlines moots a Hong Kong base and other LCCs evaluate Hong Kong as a hub, the market has been left wondering about Cathay Pacific's response. Cathay and its Dragonair subsidiary account for about half of Hong Kong's capacity.
Cathay effectively has no public response. While deep down it is watching the market and undoubtedly weighing possible reactions, from a business perspective it says LCCs will not impact its business while to the general public its push has been to offer a limited number of discounted web-only tickets, "Fanfares", as a reminder that it can offer fares on par with LCCs.
Any airline can cut fares, but few can do so profitably. Fanfares account for less than 1% of seats, relatively isolating Cathay from any pricing detriments, but reminding the carrier this is no response to LCCs either taking existing traffic or creating new demand Cathay will be unable to tap. Structural change is needed.
Australia needs to urgently negotiate expanded international air capacity which is constraining access to services from some of the country’s most important markets in Asia along with the United Arab Emirates. Capacity for several Asian markets, including China, Hong Kong, Vietnam, Malaysia and the Philippines, is fully utilised by carriers from those countries which are important source markets for both tourism and trade.
The Australian Government is being criticised for not negotiating new bilateral capacity to keep pace with demand. Melbourne Airport CEO Chris Woodruff said at the Australian Airports Association convention in Nov-2012: “These agreements provide the framework in which we can go out to the international market and attract new air services to meet the increasing demand for travel to and from Australia. The Government needs to lead from the front on this issue. Our bilateral agreements need to provide plenty of capacity for future growth in passenger numbers.”
Hong Kong is no Singapore for low-cost carriers – in early 2013 LCCs account for 5% of all seats at Hong Kong, compared with 27% of seats in Singapore. But Hong Kong is on the verge of a possible rapid structural change that could see LCCs account for approximately 15% of seats in Hong Kong in 2015.
The spike in LCC presence is predicated on a number of factors, including the successful launch of Jetstar Hong Kong, the continued expansion of mainland China’s Spring Airlines and the mooted re-launch of Hong Kong Express into an LCC. The fast ascent of LCCs will level off around the middle or latter part of the decade when almost all slots at Hong Kong airport will likely become utilised, leading to the possibility of a period of almost no growth until the completion of a much-needed third runway, which will not open until around the turn of the decade. Singapore in contrast has enjoyed many years of rampant LCC growth.
As the Hong Kong slot shortage comes closer into view, airlines are participating in an effective slot grab, growing routes or maintaining unprofitable capacity in order to secure slots and hope the services will later be sustainable.
Hong Kong Airlines continues expansion; Jetstar HK appoints CEO & Dragonair to grow closer to Cathay
The previous one-size-fits-all regional market from Hong Kong continues to go through rapid segmentation as competition diversifies. Fast-growing Hong Kong Airlines will significantly expand its frequency over early 2013, especially into mainland China, allowing it to match or surpass full-service peer Dragonair on overlapping cities.
The additional frequency will also elevate its expansion ahead of LCC Spring Airlines, although this is in terms of schedule and not price, where Spring retains the edge.
Further competition at the low end of the market is set to come from Jetstar Hong Kong, which has appointed its first CFO and CEO and formally received Beijing’s blessing, indicating the rejection from Hong Kong authorities that Cathay Pacific hoped for is increasingly unlikely.
Cathay meanwhile is seeking to present a unified premium experience between itself and subsidiary Dragonair, which may grow even closer to Cathay with a re-branding exercise; a proposed “Cathay Dragon” name could be a possibility to have a stronger positioning in a changing market.
Dragonair has taken a backseat in the public limelight since Cathay Pacific acquired the carrier in 2006, despite Dragonair accounting for about a quarter of the group's passengers and its network into mainland China – the largest of any foreign carrier – being a key asset driver.
Dragonair had been allowed to be the less sophisticated brand in a bid to preserve the status of Cathay, but Dragonair will now grow the closest it has ever been to Cathay as it embarks on what will likely be another record year of passenger growth and destinations served.
A new aircraft interiors programme, its first in a decade, will see Dragonair adopt Cathay's interior and service elements while a new staff uniform will be more similar to Cathay's than previous iterations. Driving the change and multi-million dollar investment is a series of messages that Dragonair needs to piggyback off Cathay's high-end premium reputation.
It certainly took North Asia some years to have momentum for low-cost airlines that was anything like booming Southeast Asia. 2012 delivered on that with three new LCCs launching in Japan and plans underfoot in Hong Kong for Jetstar Hong Kong as well as a possible transformation of Hong Kong Express into a LCC. While elsewhere the region may not have gone as far as producing LCCs, there is active discussion of having LCCs and the reforms needed to welcome and support them.
Talk is strongest in Taiwan, which has seen considerable growth from LCCs in North and Southeast Asia. South Korea is considering how and when its LCCs can become better competitors, shedding some of the comforts they have been unwilling to charge passengers. Japan will see growth, from existing LCCs and new ones, a challenge for incumbents. Reforms in China may enable LCCs in the future to launch, while all LCCs are watching how to be hybrid and chase yields. These are eight North Asian LCC topics to watch for in 2013.
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