Budget airline Hong Kong Express aims for 10pc market share

Carrier joins rivals Cathay Pacific and Dragonair in expressing opposition to Jetstar Hong Kong's application for an operating licence

PUBLISHED : Friday, 13 September, 2013, 12:00am
UPDATED : Friday, 13 September, 2013, 3:00am

Hong Kong Express Airways says it hopes to get 10 per cent of the city's market for passenger flights by offering cheap fares when it transforms itself into a budget airline next month.

A one-way ticket to Kunming, Yunnan province, excluding taxes and fuel surcharges will be HK$298 - less than half that offered by CX fanfare, a weekly fare promotion of Cathay Pacific Airways.

The HK Express fare to Phuket, Thailand, will be HK$368 - a third of the fare of low-cost rival Jetstar Hong Kong, which awaits approval to become the city's second budget carrier.

Flights to Tokyo's Haneda airport, the priciest among the airline's seven destinations announced yesterday, will be HK$758, on par with Osaka-based low-cost carrier Peach Aviation.

When there are just two people, it is great; when there are 1,000 people, it’s not

The airline's deputy chief executive, Andrew Cowen, said that not all tickets would be that cheap. Cowen said HK Express would add six aircraft next year, and by 2018 its fleet would be 30-strong. He would not estimate the proportion of total sales that promotional tickets would account for, as airfares were adjusted according to demand, he said.

Zhang Qiang, the airline's president, said it could break even within two years and gain a market share of 10 per cent "in the near future".

Yang Jianhong, the executive chairman of Hong Kong Express, said in June the firm would lower costs per seat by 40 per cent by increasing the use of aircraft to 13 hours per day from nine and eliminating free catering and check-in baggage on board.

The 10 budget carriers that fly to Hong Kong have a combined market share of 5 per cent. Joining Cathay's and Dragonair's opposition to Jetstar Hong Kong's application for an operating licence, Cowen said too many airlines competing for too few flight slots and parking stands would result in congestion.

"It's like shopping in a mall. When there are just two people, it is great; when there are 1,000 people, it's not so good," he said.

Jetstar Hong Kong chairwoman Pansy Ho Chiu-king said on Wednesday the market was big enough for new players, with a new midfield terminal and a third runway on the way.

HK Express said it would announce more destinations in the coming weeks. Cowen said the airline would avoid competing head on with sister airline Hong Kong Airlines, which would focus on business destinations such as Beijing and Shanghai.

The budget airline is already flying to one mainland city. It will start flying to two cities in Thailand and one in each of Malaysia, Taiwan and the mainland on October 27. It will fly to Tokyo and Osaka from November.