Cathay Pacific budget carrier HK Express eyes mainland China for expansion, aims to boost capacity

Cathay Pacific Airways’ budget airline, HK Express, aims to double the number of flights to mainland China over the next two years and increase its overall capacity by the end of 2024 as it seeks to expand its global presence.

In an interview with the Post, HK Express CEO Jeanette Mao offered an upbeat assessment of the carrier’s outlook, saying she expected capacity to grow 20 per cent to 30 per cent by the end of this year, reaching 170 per cent of pre-pandemic levels from the present 140 per cent.

She also revealed plans to increase the low-cost carrier’s fleet from 35 aircraft to 40 this year and to 60 by 2028, as well as expand the number of destinations from the current 24 to 30 by the end of 2024.

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“Based on the number of flights, Northeast Asia – such as Japan, Korea and Taiwan – accounts for 70 per cent of our total flights while Southeast Asia accounts for around 25 per cent, with the remaining 5 per cent to mainland China,” she said on Tuesday.

“So we expect in the next two years, our number of flights to mainland China can increase from 5 per cent to maybe 10 per cent of the total network.”

HK Express is planning to increase the size of its fleet of aircraft. Photo: Handout

HK Express returned to profitability last year for the first time since it was acquired by Cathay Pacific in 2019, making HK$433 million (US$55.3 million) compared with a HK$1.36 billion loss in 2022, owing to high demand for short-haul flights. Cathay acquired HK Express for HK$4.93 billion.

HK Express carried more than 4.1 million passengers in 2023, while the number this year hit an all-time monthly high of over 500,000 in March. It offered close to 24,000 flights last year.

Mao said the company was going to announce its third mainland destination very soon as part of its plans to expand its presence in the nation.

“Currently we only have Ningbo and Beijing Daxing [airport], these two destinations in the country. In the future we are expanding to more destinations in mainland China,” she said.

Amid growing demand for short-haul flights, Mao said bookings stayed strong for the Easter holiday, at about 94 per cent, with Japan the most popular destination.

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Mao said airfares would gradually adjust as supply grew to meet demand, but she predicted there would not be drastic reductions in ticket prices because of rising costs such as for labour and fuel, and inflationary pressure.

“This year the yield will continue to normalise because supply will increase. But the normalised trend will be gradual ... It’ll be a mild adjustment,” she said.

“With our position as the only Hong Kong-based low-cost carrier, our commitment is to bring affordable fares to our customers in Hong Kong and around Asia ... All airlines have a similar challenge.”

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Unlike Cathay Pacific, HK Express did not have any staffing issues but the company would hire an additional 500 aircrew to cope with its expansion this year, bringing the number to more than 1,200, Mao said.

“We have enough staff to make sure we reach 140 per cent of pre-pandemic capacity. I am confident we can recruit enough staff to fuel our growth by the end of this year,” she said.

“We recruit not only in Hong Kong, we are also actively recruiting overseas ... For cabin crew, we recruit in the Greater Bay Area, and also in Japan, Korea, Thailand and Malaysia.”

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