Well, after a bit of speculation, and confirmed talks – it seems that Cathay Pacific has agreed to buy Hong Kong Express (HK Express)
The transition is valued at HK$4.93 billion (US$628 million). It covers the low-cost element of the HNA group airline based in Hong Kong, and excludes other parts of the HNA Group (such as Hong Kong Airlines).
Cathay Pacific for some time has sought to enter the low-cost space at Hong Kong International Airport – however, a lack of slots has prevented this (and won’t be resolved until Hong Kong international airport expands circa 2024).
It means that Cathay Pacific finally has a pre-built foothold to go after rivals such as Qantas (with their Jetstar group operation), Singapore Airlines (with Scoot) as well as AirAsia.
In terms of the transaction, expect it to close by 31st December 2019
In terms of fleet, Hong Kong Express operates an all Airbus narrow body fleet, made up of:
- 8 Airbus A320
- 5 Airbus A320neo
- 11 Airbus A321
The airline has additional frames on order for A320neos and A321s
Cash for HNA Group, expansion for Cathay Pacific
With this transaction, HNA Group will have some desperately needed cash in its coffers. It also removes component of the complexity of the group – which might be welcome in untangling what is going on there.
Meanwhile, Cathay Pacific has a ready-made low-cost airline, which it can shape as it desires.
As well as much desired slots at Hong Kong International Airport.
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