Cathay Pacific in talks to acquire Hong Kong Express Airways, potentially swooping in on lucrative low-cost market
- Potential deal would leave city’s flagship airline with a third city-based carrier and about half the airport’s runway slots
- No mention of discussions with struggling Hong Kong Airlines, which is also backed by mainland China’s HNA group
Cathay Pacific Airways plans to acquire budget carrier Hong Kong Express Airways, capitalising on debt trouble at mainland China’s HNA Group and potentially facing off with rivals in the booming low-cost market.
Hong Kong’s flagship airline said on Tuesday it was “in active discussions about an acquisition involving [HK Express]”, but did not disclose how much of a stake it was seeking in the HNA-backed airline or how much it would pay.
If completed, the deal could leave Cathay Pacific with a third city-based carrier and about half of the airport’s runway slots. Cathay Pacific said no agreement had been reached and there was no certainty of a deal.
There was no mention of Cathay Pacific’s potential interest in a stake in Hong Kong Airlines, of which HNA is also the biggest shareholder.
Analysts said buying HK Express would be a better move for Cathay than launching a budget carrier of its own.
“It is the first time Cathay Pacific is venturing into [the budget market] at a relatively low cost,” said K Ajith, director of Asia Transport Research at investment bank UOB Kay Hian.