It seems that Cathay Pacific is taking more than a keen interest in local operator, Hong Kong Express Airways
So much so, that the airline has made a statement to the Hong Kong Stock Exchange:
Cathay Pacific Airways Limited (the “Company”) has noted media reports suggesting that the Company may be in discussions to acquire shares in Hong Kong Express Airways Limited (“HKE”) and Hong Kong Airlines Limited from HNA Group Co., Ltd.
The Company hereby confirms that the Company is in active discussions about an acquisition involving HKE. No agreement for the acquisition has been entered into and there can be no certainty that any agreement will be entered into. Further announcement(s) will be made as and when appropriate.
Filling in the low cost gap
Cathay Pacific has been absent from the low-cost market, and this could be the way to do it. To remind you, the airline is made up of three major aviation business that we see around the world:
- Cathay Pacific – the airline we know and love
- Cathay Dragon – what was Dragonair. This is not a low-cost carrier – rather it was a brand that was recognised better in the Greater China region than Cathay Pacific
- Cathay Pacific Cargo – the cargo wing of the airline
So, as we can see, there’s a nice gap here.
Hong Kong Express Airways (or HK Express) is an HNA Group airline who has been in and out of the news with some of the issues they’ve had. They currently operate a fleet of Airbus narrow-body aircraft, including:
- 8 Airbus A320ceo
- 5 Airbus A320neo (with 7 to come)
- 11 Airbus A321ceo (with 1 to come)
The airline operates to Cambodia (1 destination), China (2 destinations), Japan (10 destinations, with an 11th starting in July), Northern Mariana Islands (1), South Korea (3), Taiwan (1 destination), Thailand (4 destinations) and Vietnam (2 destinations)
The South China Morning Post has more on the takeover, which would leave Cathay Pacific owning over half the slots at Hong Kong International Airport
Cathay Express? Hong Kong Pacific Express?
Providing Cathay Pacific with the right price on HK Express, it could be an easy way in for the airline to start low-cost operations. One needs only look at the local competition, with AirAsia and Jetstar (Qantas) and Scoot (Singapore Airlines) nibbling away at the market share.
This had lead Cathay Pacific to reduce fares.
Adding HK Express could help them restore that balance on some routes.
This move… could get interesting – fast.
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