Dragonair to curb hiring and buying new planes amid China slowdown
The carrier will cut back on hiring cabin crew and buying new aircraft because of mainland economic woes and slow air traffic growth
Hong Kong Dragon Airlines, a fully owned subsidiary of Cathay Pacific Airways, has reduced its recruitment and fleet expansion plans this year because of the slowdown in the mainland economy and air traffic growth.
Patrick Yeung, chief executive of Dragonair, said the airline will recruit 100 cabin crew staff this year, compared with 330 recruitments last year.
The carrier will increase its fleet by three planes to 40 by the end of this year, compared with five new planes last year.
Dragonair did not add any new routes in the second quarter after adding four destinations in the first quarter. Last year, the carrier launched and re-launched eight destinations. Yeung said Dragonair is evaluating new destinations but he did not elaborate.
Cathay and Dragonair posted a 6 per cent year-on-year drop in passenger traffic on mainland routes last month. Mainland consumer price index grew 2.1 per cent year on year in May, down from 2.4 per cent in April.
Mainland destinations are the mainstay for Dragonair because they account for 80 per cent of total flight traffic. The airline flies to 22 mainland cities, including 16 daily flights to Shanghai and nine to Beijing. Two low-cost carriers, Jetstar Hong Kong and Hong Kong Express Airways, to be launched in Hong Kong soon, have yet to exert any pressure on Dragonair, Yeung said.
"We have been in the market for 28 years and we know our customers' needs," he said.
"Asia-Pacific is a fast-growing market and we can leverage on our parent's network to obtain more customers."
Yeung said that the aviation market in Hong Kong is already competitive and 96 airlines fly to Hong Kong, 10 of them low-cost carriers (LCCs), including Spring Airlines, AirAsia, Jetstar and Tiger Airways. However, apart from Spring Air, other LCCs are based outside the mainland.
Jetstar Hong Kong said it would fly to the mainland as well as other regional routes in Asia by offering ticket prices 50 per cent lower than the prices offered by full-service carriers.
Dragonair, on the other hand, said it would compete against other carriers by promoting quality of service. It has won the world's best regional airline award by Skytrax, a British airline passenger surveying firm, three times since 2010.
The carrier will double mileage credit earned by Hong Kong or Macau residents on any roundtrip flight to the mainland between July 9-23. Hong Kong Express will transform into a budget carrier by September while Jetstar Hong Kong is going through the licensing process.