Hong Kong Express to re-brand as LCC and switch B737s for A320s as Cathay stands clear of LCCs

Hong Kong is set to receive its first ever short-haul LCC in a move that will see the market further press Cathay Pacific to justify not having a LCC subsidiary. Hong Kong Airlines president Yang Jianhong stated Hong Kong Express Airways will be transformed into an (unnamed) LCC in Jul-2012 or Aug-2012, operating under its new low-cost model to cities in mainland China, South Korea, Japan and Southeast Asia. It will use the traffic rights of Hong Kong Express to Shanghai, Beijing, Singapore, Seoul, Kuala Lumpur, Osaka and Taipei, according to reports in the South China Morning Post.

Mr Yang stated the new carrier will appoint a CEO with European LCC sector experience and will acquire 15 A320s over the next three to four years. Its current fleet of five B737-800s will be transferred to Hong Kong Airlines in 2012. The new LCC will pose a new challenge on lucrative routes from Hong Kong to Beijing, Shanghai and Taipei and opens the door for a pan-Asian carrier like AirAsia or Jetstar to become involved.