Cathay Pacific

Carrier plans to dump HK-London cash-guzzler

PUBLISHED : Wednesday, 08 August, 2012, 12:00am
UPDATED : Wednesday, 15 August, 2012, 11:11pm

Hong Kong Airlines is set to terminate its cash-guzzling, all-business-class service between Hong Kong and London from next month.

The daily Hong Kong-Gatwick route operated by three Airbus 330-200s with all-business-class configuration, was seen as a trunk, or major, route for the carrier to tap into the intercontinental market.

But as a result of poor planning and miscalculation, the route has been deep in the red ever since it was launched in March, sources from within the company said.

But the airline is yet to notify the Civil Aviation Department (CAD) about the decision to terminate the route, a CAD spokesman said.

The ill-fated route will only have lasted seven months before its final flight to pick up Hong Kong athletes from the London Paralympics. Hong Kong Airlines is the official Hong Kong carrier for the event.

Yang Jiang-hong, president of Hong Kong Airlines, could not be reached for comment yesterday.

The operating cost of the 14-hour flight is estimated at HK$3 million, including fuel costs, crew allowances and inflight meals.

Insiders said the carrier burns about HK$1 million to HK$2 million a day on the service and around HK$10 million a month. The monthly losses are lower than they would normally be because the airline cancels the services from time to time depending on the demand.

The three Airbus 330-200s, featuring 34 lie-flat seats and 82 recliners, were designed exclusively for Hong Kong Airlines by the manufacturer. The unique, all-business-class configuration would make these aircraft suitable only for routes with plenty of business travellers and big spenders.

Certain European destinations, such as Brussels and Barcelona, are on the company's radar to replace London, according to an executive who did not want to be named. The airline's planning and commercial departments have yet to decide on a fresh route as they are still struggling to work out a sound business plan for a new destination.

The cancellation of the much-hyped route comes after the CAD imposed new restrictions on Hong Kong Airlines last month, when the carrier was told it would not be allowed to expand its fleet beyond its existing size of 20 or diversify to other aircraft types until it meets the safety requirements set out by the regulator.

Hong Kong Airlines has been struggling ever since it terminated the contract with its erstwhile maintenance provider Hong Kong Aircraft Engineering Company (Haeco) and changed to another contractor in June. The hiccups as a result of this transition have lengthened the turnaround time and caused flight delays.

Adding to its woes, last month's Typhoon Vicente created a huge backlog of passengers that Hong Kong Airlines failed to clear even after a week, denting its reputation even further. The carrier hired Artemis Associates two days ago as its new public relations agency.