Cathay Pacific has completed its acquisition of low-cost rival HK Express and is moving quickly to integrate the airline as a wholly-owned subsidiary. Staff layoffs have started, a Cathay executive has been seconded to the budget airline, and Cathay has plans to merge HK Express’ loyalty and holiday units into its own.
Li is part of HNA management and observers widely expected his departure. But Cathay has also quickly laid off some HK Express managers, including at flight operations and network planning, raising the possibility Cathay will takeover these core functions. The industry is closely watching how Cathay will run this dual-brand full-service/low-cost airline combination and if Cathay can give benefits to HK Express without degrading the LCC’s natural efficiency and cost psyche.
Cathay has appointed Ronald Lam as HK Express CEO. He was previously Cathay’s director of commercial and cargo and he leaves that post. This contrasts to Cathay Dragon, the group’s regional full-service arm. Cathay Dragon’s CEO is Algernon Yau, but Yau is also director service delivery of Cathay Pacific. The dual titles reflect that Cathay Dragon is essentially fully integrated into Cathay Pacific and the CEO title is preserved for business and regulatory formalities. The different nature of HK Express’ business commands a distinct focus.
Cathay’s Asia Miles loyalty programme is expected to takeover HK Express’ Reward-U loyalty programme while HK Express’ holiday arm U-Fly Holidays is expected to be folded into Cathay Pacific Holidays.
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