Cathay Pacific, high cost and pilot-constrained, promotes regional unit Dragonair to reduce costs

Premium Analysis

Asian airlines have long had second brands, often for a regional airline flying to secondary markets. For equally as long airlines have struggled with how to work the brands in sync - somewhere between fully aligned with the flagship parent and full independence. This is starting to change, with the most prominent example being Cathay Pacific's change of Dragonair's branding to Cathay Dragon, effective 21-Nov-2016. Product too has already been largely aligned.

Dragonair has expanded out of its mostly China niche to take over Cathay's Penang service and launch flights to Denpasar Bali and Tokyo Haneda, supplementing Cathay services and giving the two a larger group presence. The boldest move yet is Dragonair taking over the Kuala Lumpur route from Cathay in 2017. Cathay will transfer five A330s to Dragonair, more than what is needed for four daily Kuala Lumpur flights, indicating that more transfers are likely.

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