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Hong Kong

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Hong Kong

IATA Code
HK
Airlines
International Airlines serving this country (excluding codeshares)
Airports

One of two administrative regions of China, Hong Kong has experienced an advancing aviation industry for a number of years. Hong Kong's only civil airport is Hong Kong International Airport (HKG), a leading passenger gateway in Asia and one of the busiest airports in the world in terms of international passengers and cargo flights. With over 85 airlines, HKG is the hub for Cathay Pacific, Dragonair, Air Hong Kong, Hong Kong Airlines and Hong Kong Express. Although Hong Kong does not have a national airline, Cathay Pacific would be the closest to such. The Civil Aviation Department is the aviation authority in Hong Kong, responsible for providing air traffic control services as well as reporting to the Government. 

Airports in Hong Kong


 
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Cathay Pacific adds A350 to Vancouver, preparing for Hong Kong Airlines' long haul entry

2-Sep-2016 10:02 AM

Cathay Pacific's fortunes have been weakened in recent years as competition mounts, mostly from greater regional capacity, some of which feeds other airlines' long haul hubs. Locally Cathay has faced home market competition from Hong Kong Airlines and LCC HK Express, which together have weakened Cathay on its regional services. Yet Cathay has been relatively insulated from the growing direct competition on long haul routes, which have supported its network in recent times and account for a high share of revenue.

Hong Kong Airlines is growing long haul to Australia and New Zealand, but its major threat to Cathay is on North American and European routes, to be launched with forthcoming A350s. Cathay appears to be making a pre-emptive strike by deploying its attention-getting A350 to increase flights to Vancouver, which Cathay expects to be an early Hong Kong Airlines destination.

This is the first time that Cathay is growing Vancouver since the entry of Oasis Hong Kong in 2007. After Oasis' subsequent collapse Cathay withdrew the additional capacity it had mounted. Hong Kong Airlines, however, has stronger backing – HNA – and is already known in the territory. Hong Kong Airlines' impact is guaranteed, but the question is to what extent. This depends on how Hong Kong Airlines sharpens as it becomes the city's second flagship airline.

Cathay Pacific 1H2016: market squirms at 80% profit drop. Cathay not in crisis; but must cut costs

22-Aug-2016 1:15 PM

The public did not react well to Cathay Pacific 1H2016 group profits dropping over 80%. Ironically there was little attention that the airlines have returned to being unprofitable amid factors ranging from strong competition to a USD576 million fuel hedging loss, greater than a year ago. Growth for the year is turning out to have only a minor adjustment: Cathay does not consider itself to be in crisis.

Despite squirms of supposed displeased investors and their questions about the future of CEO Ivan Chu, the actual two investors that matter are majority owners Swire and Air China. Their vision is one for the long term. Unlike airlines in the US or Europe, Cathay does not answer to the market and does not need to produce quarterly improvements. If the shareholders retain their vision and believe overcapacity is necessary to hold market share for the long term, then yield declines and unprofitability are uncomfortably accepted. The balance sheet is strong enough.

So the question is not if Cathay should address sagging yields and hedging losses, but rather whether Cathay can achieve its long term goal of being not just a premium airline but more importantly – a travel and lifestyle brand. There may not be an answer in this decade. Cathay may have the greatest self-assurance measured against the potential risk of traffic being siphoned from competitors. What is certain is that cost-cutting is needed, but remains elusive.

AirAsia exploring future opportunities in Northeast Asia: Chinese affiliate enticing, but difficult

19-Aug-2016 4:51 AM

AirAsia is doubling down its focus on North Asia with a regional office in Hong Kong overseen by former AirAsia executive Kathleen Tan, who is widely credited for AirAsia's strong Chinese relations and growth in China: AirAsia is the largest non-greater China airline company in the country. Across North Asia the opportunities are large, but the challenges equally big. A China-based AirAsia affiliate would appear to be a long term ambition.

More immediately, AirAsia is regaining a local Northeast Asia presence with the launch of AirAsia Japan Mk II in 2017. Although delayed from initial 2015 start-up projections, AirAsia Japan gives the group relevance in a large domestic market and significantly growing short haul international market.

Elsewhere in Northeast Asia the opportunities are mixed. Korea and Hong Kong are becoming saturated and remain protectionist. Macau and Taiwan are unlikely to be big enough to support a local AirAsia unit.

Hong Kong Airlines to grow in Australia via Virgin Australia partnership. Auckland launches Nov-2016

15-Aug-2016 3:17 PM

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".

Lufthansa recalibrates in Asia: JVs pull focus from Hong Kong; Swiss 777; Austrian pivots to China

9-May-2016 11:30 AM

The Lufthansa Group is taking measures across its three full service brands to recalibrate in East Asia, its second largest long haul market by ASKs after North America - and with the highest growth potential. Hong Kong has been the group's de facto hub, historically, despite the lack of a Star Alliance partner. JVs are forming with Star partners Singapore Airlines and Air China, and the Hong Kong hub will diminish in importance. This will take time: JVs with Singapore Airlines and Air China are evolving slowly, with the Asian party being conservative compared with the more experienced Lufthansa.

The JVs will enable the Lufthansa Group to fill white spots (Malaysia, Indonesia) and improve offline connections; Australia is the group's largest offline market. Many of these opportunities are markets where Gulf airlines have already dominated the market. Lufthansa has an existing JV with ANA: 17% of East Asian seats are covered under a JV. After the Air China and SIA JVs come into force this figure will rise to 64% – still less than JV coverage in North America.

Seoul Incheon airport: 49 million passengers in 15 years. Well on the way to 100 million in 2030

4-Apr-2016 12:58 PM

Seoul Incheon airport has turned 15, having first opened in late Mar-2001. The all-new airport has accumulated 49 million passengers since then, making it the fifth largest major hub in Northeast Asia. Incheon is now setting its sights on 2030: it plans to double passenger volumes to 100 million, including 20 million transfer passengers. This is nearly a tripling of 2015's 7.4 million transfer passengers who made up 15% of total throughput.

Increasing the share of traffic as transfers to 20% will be difficult: transfer passengers have been on the wane at Incheon. The total transfer volume decreased in 2014, and in 2015 was still below the 2013 peak. The 15% transfer share in 2015 is below 2014's 16% and 2013's 19%. The growth in direct seat capacity from mainland China to North America has pressured Incheon's transfer business; Beijing Capital airport will likely exceed Hong Kong's North America capacity by the end of 2016 while Shanghai Pudong is not far behind.

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This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.