Hong Kong Ailrines looks to Boeing for expansion, Cathay in its sights

There may be something to the claims Hainan Airlines Group owned Hong Kong Airlines made this week about ordering the Boeing 787.

Declaring it won’t remain an all-Airbus operator for ever and will eventually order 787’s to expand its network is one thing. Having the slots at Hong Kong’s international airport is another.

Cathay Pacific and Cathay Dragon are having a hard time fending off low cost short and mid haul from HKA, and they’re about to introduce A359’s on directly competing routes with Cathay Pacific to the US and Canadian West Coast. With more A350’s coming that competition is only going to get worse.

Yet one of Cathay Pacific’s strongest hands is its position at Hong Kong International and the very small number of slots available for HKA to become too much more of a local problem.  Cathay is already fending off Chinese mainland low cost and main line carriers.

Drastic changes to its internal organisation and a cost reduction excercise have been implemented, and the whole re-brand of DragonAir into Cathay Dragon, is a deliberate attempt to draw the two closer in identity and ensure long haul and regional work better together, getting more from transfer flights and keeping them in the Cathay family.

To make things worse HKA even challenges Cathay in the cargo market, using A332F’s now, its minor league at present, but makes life tougher for Cathay in another of its key operations.

There’s no denying however that for Cathay, as with every other legacy airline, the world is changing faster than traditionally managed but successful airlines realise.

Hong Kong Airlines owners are part of a huge group that’s already swallowed up half a dozen Chinese airlines, invests in airports around the world, maintenance companies, and has stakes in airlines from TAP Portugal to Cargolux.

To survive against such odds is going to take every bit of management experience and brand leverage the Swire Group who own Cathay, have ever had.