Hong Kong aviation

Embattled Hong Kong Express names new CEO from Africa-based airline

Airline plucks head of small-scale carrier backed by troubled Chinese conglomerate HNA Group

PUBLISHED : Saturday, 27 January, 2018, 9:18am
UPDATED : Tuesday, 30 January, 2018, 9:57pm

Budget carrier Hong Kong Express took its latest step to bolster its leadership amid a company shake-up by naming the head of a young Ghana-based airline backed by troubled Chinese conglomerate HNA Group to take the helm.

The CEO and co-chairman of small-scale Africa World Airlines, Michael Luo Cheng, overseeing a fleet of six planes, was appointed with immediate effect as chief executive officer, the company announced on Friday night.

Luo will be responsible for the airline’s overall direction and strategy, playing a key part in its investments and operational decisions.

The move came as the budget carrier serves a punishment meted out by Hong Kong’s aviation regulator for cancelling flights during a major Chinese public holiday last September.

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Luo would monitor day-to-day business, which would be led by company president Li Dianchun, who was poached from Hong Kong Airlines. Zhong Guosong would remain executive chairman and overlap with Cheng in a number of duties.

In its statement on Friday, the company said the appointment would “enhance the quality of customer service and improve management efficiency”.

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HNA Group, a major Chinese firm with interests in aviation, financial services, tourism and real estate, is under significant financial pressure amid a debt-fuelled buying binge of assets totalling US$40 billion.

In recent months, its bankers have moved to shore up their exposure to the Hainan province-headquartered company. This has caused it liquidity challenges.

HNA Group has interests in more than a dozen airlines in mainland China and Hong Kong, plus stakes in foreign carriers including Virgin Australia and Brazil’s Azul Airlines. The company has a major stake in Hong Kong Airlines, the city’s third-largest airline.

Meanwhile, Hong Kong Express has encountered its own high-profile problems.

Last November, the Civil Aviation Department banned Hong Kong Express from taking delivery of new aircraft for new routes or adding flights or destinations to its network until April 30 next year.

This punishment came for its sudden scrapping of 18 flights between Hong Kong and Seoul, Osaka and Nagoya from October 1 to 8 – ruining travel plans of some 2,000 passengers during the busy “Golden Week” National Day holiday period.

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The episode led to the sacking of CEO Andrew Cowen and triggered an overhaul of the company’s management team.

Based at Hong Kong International Airport, Hong Kong Express has a fleet of 23 single-aisle aircraft. It flies to 26 destinations in Asia.

Africa World Airlines was founded in 2010 as a joint venture between Hainan Airlines and several partners. It flies a half-dozen routes in Ghana and western Africa.