Cathay Pacific has agreed to a deal to acquire low-cost competitor Hong Kong Express Airways Ltd. (branded as ‘HK Express’).
The Hong Kong based long-haul airline will pay a total of HK $4.93 billion (US $628 million) to Chinese HNA Group, the current owner of HK Express.
With this deal, Cathay Pacific will now control three of four major airlines in Hong Kong, also including Cathay Dragon (formerly Dragonair), its subsidiary for regional flights. The only remaining competitor is Hong Kong Airlines, a struggling airline, belonging to HNA Group. This is the first time Cathay is entering the low-cost airline market. Itself and Cathay Dragon are both full service carriers.
HK Express, Hong Kong’s only budget airline, was founded in 2004 and operates 24 Airbus A320 family aircraft on short- and medium-haul routes from Hong Kong International Airport to destinations in Asia. The airline made losses of HK $141 million (US $18 million) in 2018.
Cathay Pacific and Cathay Dragon carried more than 35 million passengers last year and currently operate a combined fleet of 203 airplanes, consisting of 23 single-aisle, 159 wide-body and 21 freighter aircraft.
Jakob Wert is an aviation journalist from Germany. He built up the website IFN.news and is the Editor-In-Chief of International Flight Network.