image

Hong Kong aviation

A turbulent year for Hong Kong aviation amid losses, job cuts and flight cancellations

Flagship carrier Cathay Pacific dominated the news, but rival Hong Kong Airlines and budget player Hong Kong Express had their share of headlines

PUBLISHED : Saturday, 23 December, 2017, 10:00am
UPDATED : Saturday, 23 December, 2017, 10:00am

This was a busy year in the world of aviation in Hong Kong.

Cathay Pacific Airways dominated the headlines from the get go. Hong Kong’s flagship airline started the year weighed down by HK$575 million in losses in 2016, setting the stage for a wide-ranging restructuring of the business.

First, the airline ushered in fresh leadership to oversee some of the biggest challenges and changes set to make or break the company. In March, Cathay Pacific replaced CEO Ivan Chu Kwok-leung, with then chief operating officer Rupert Hogg taking over the reins.

A review of the business culminated in the airline’s biggest round of job losses in almost 20 years. In May, the company set out to remove 600 jobs from the company’s Hong Kong head office. The cuts marked the start of a three-year restructuring effort to save HK$4 billion by 2019.

This was the year that Cathay spelt out what kind of economy-class experience passengers would get in the future, unveiling plans to squeeze in extra seats on Boeing 777-300 planes from the middle of 2018. The airline would also press ahead with investing in newer planes, revamped premium airport lounges and new on-board dining experiences to win over disillusioned passengers.

The flagship carrier’s woes continued into the latter part of the year, as it signalled in its half-year report that its HK$2.05 billion loss in the first six months of 2017, the biggest in almost two decades, would likely prompt a further slide into the red by the end of the year, as part of the first set of back-to-back losses in the company’s 70-year history.

Cathay also had to contend with the emergence of its much smaller arch-rival Hong Kong Airlines, which was soaring with ambition to take a slice of its business on key routes in Europe and North America with brand new hi-tech aircraft. The challenger airline aimed to undercut Cathay on price on flights to key destinations, shaking up competition and providing passengers with an alternative.

On the no-frills end of the air travel market, Hong Kong Express had its wings clipped after a mix-up in human resources saw a dozen flights cancelled, angering the city’s civil aviation regulator. In addition to penalties meted out by the authorities, the flight cancellation saga, which occurred ahead of a major Chinese festival at the start of October, cost the budget airline’s CEO his job and tarnished the young brand.