HK Express, Greater Bay Airlines address HKG’s low cost demand

While the Hong Kong market has historically been dominated by the full service business model, locally based carriers in the low cost or hybrid category are likely to have increasing influence in coming years.

Cathay Pacific plans to grow its HK Express LCC subsidiary, and the start-up Greater Bay Airlines (GBA) will partially compete in this segment with a "value carrier" model. The relatively low penetration of LCCs in Hong Kong should give opportunities for both approaches.

It is still unclear precisely what GBA's model will look like, but it appears to be aiming between full service and LCC. The airline is moving closer to beginning service, and although it will initially have a small fleet and network, it has larger growth aspirations.

The Cathay group also has ambitions for HK Express. Cathay was a later convert to the dual business model approach than some of its major competitors, but now views HK Express as a vital part of its strategy to attract a broader section of demand. The parent has fleet expansion plans for HKE, which may be very important to the group in the post-pandemic market.