Dragonair is spending hundreds of millions of dollars revamping its business and economy class cabins as it expands its fleet, recruits extra cabin and flight crew, and adds new destinations.
Chief executive Patrick Yeung Wai-tim declined to specify how much the revamp is costing, saying the figure was commercially sensitive. But he said it would "definitely be much higher" than the HK$195 million programme Dragonair launched in 2003 to upgrade its cabins.
Part of the reason for the cost increase was because Dragonair's passenger fleet has almost doubled, from 21 aircraft in early 2003 to 38 at present.
Yeung said the previous economy class makeover was made during that 2003 drive, while the last business class upgrade was done in 2005.
The first aircraft with the new cabins will be an Airbus A330 that will start flying in March, while the whole revamp will be completed by the end of 2014. The new features include wider business class seats that will have up to an extra three inches of pitch, with separate seat and leg-rest reclining functions, as well as wider economy class seating.
A video-on-demand inflight entertainment system, similar to that on parent Cathay Pacific, will be installed, with ports for iPhones, iPads and USBs in both classes, while a new cabin crew uniform, the first for 12 years, will be introduced.
Yeung said that while 2013 would be a year of challenges, he was confident about prospects for the airline, pointing out that China, and Asia in general, was less affected by the poor global economic conditions found especially in Europe and the US. He said he expected oil prices to remain around US$100 to US$110 a barrel and saw no factors that could lead to volatile oil prices. Yeung said the airline carried a record 7.8 million passengers last year, while the passenger load factor, a measure of an airline's capacity utilisation, rose more than 7 per cent.
Combined traffic figures from Dragonair and Cathay Pacific for 2012 show revenue passenger kilometres rose 6.1 per cent on mainland flights and 8.1 per cent on services to southeast Asia, which are Dragonair's major markets. But additional passenger capacity added by both airlines in these regions outstripped revenue growth.
Yeung said six aircraft were delivered last year, with another A330 due to arrive in March.
Dragonair will launch flights to Wenzhou today and services to Da Nang on March 28. These follow the start of services to Zhengzhou and Yangon this month, and eight extra cities last year.
Yeung said 100 cabin crew and 14 pilots would be recruited this year to cope with the growth. But he would not be drawn on the pay prospects for the 1,700 existing cabin crew.