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HK Express SWOT: refocusing on cost base, ontime performance, & finding a place in new HNA strategy

HK Express has changed from being the HNA Group's darling child. HK Express relaunched as the city's only LCC at the favourable time of decreasing fuel prices and foreign exchange depreciation, while Japan and Korea sought to build inbound visitors and seize pent-up demand.

Reduced aircraft utilisation and growing slot challenges resulted in HK Express needing to focus on reducing its cost base and restoring operational integrity after its on time performance had dropped to the 60% range. A surprise Oct-2017 management change adds uncertainty about whether HNA is willing to work through the down cycle (perhaps inevitable, given the history of airlines) and build upon HK Express' core strengths, or will instead seek greater alignment with Hong Kong Airlines, or perhaps even a quasi-merger.

HK Express has told the local regulator it will not add flights or destinations through 30-Apr-2018 as it formulates a new commercial plan.

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