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Hong Kong Airlines wants to disrupt Cathay Pacific on trans-Pacific routes

09/26/2017| 11:24:07 AM|

Hong Kong Airlines wants to dislodge 70-year-old Cathay Pacific from its perch as Hong Kong’s leading —and until recently, only — airline flying nonstop to North America.

Hong Kong Airlines, which began operations in 2006, started flying to North America in June when it launched a Vancouver route. It has said it will add Los Angeles in December, followed next year by San Francisco, New York and London, a city the airline briefly served in 2012 with an all-business class configuration.

On the routes, Hong Kong Airlines will compete with Cathay, and several U.S., Canadian and European airlines, including Air Canada, British Airways, American and United airlines. It will not, however, compete with low-cost long haul airlines.

There are already too many seats for sale between the United States and many Asian airports, some airline executives say. And what was once a profitable market segment — mainland Chinese travelers transferring in Hong Kong to fly to North America and Europe — has dried up as Chinese airlines launch their own long-haul flights.

A weaker market been a concern for Cathay, which in August posted its largest first-half loss in at least 20 years. Cathay recently changed CEOs, and it is undertaking a corporate restructuring to boost results. Meanwhile, United Airlines recently has cited Hong Kong as an underperforming market.

But Hong Kong Airlines, with only 35 planes, is not a typical scrappy upstart. It is part-owned by the giant Chinese conglomerate HNA Group, owner of rapidly-expanding Hainan Airlines, and an investor in several larger carriers, including Brazil’s Azul, TAP Air Portugal and Virgin Australia. Its parent company has helped Hong Kong Airlines quickly added widebody planes, in part by sending it aircraft destined for other airlines, including three Airbus A350s ordered by Azul. 

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TAGS: Hong Kong Airlines | Cathay Pacific | HNA
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