Budget Airline Hong Kong Express To Fly To Malaysia, Mainland China

Hong Kong Express Airways said yesterday it will fly to two mainland cities and Malaysia when it starts operating as a budget carrier in October.

Prices will be at least 30 per cent lower than those of rival Cathay Pacific Airways.

The airline, controlled by mainland-based HNA Group, has disposed of its Boeing 737s. It now has three Airbus 320s but will increase that number to five by September.

It will have a fleet of 30 planes in five years and plans to hire 150 staff by the end of the year.

"For too long Hong Kong has been denied the opportunity to travel at low cost to the mainland and the rest of Asia," deputy chief executive Andrew Cowen said.

Yang Jianhong, the executive chairman of Hong Kong Express, said 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 having no free catering or check-in baggage on board.

Yang added he expected the carrier to break even within two years.

The airline's transformation involves a management reshuffle. Steve Allen is the carrier's commercial director. Two other expatriates from low-cost carriers have also joined the airline.

The carrier will operate independently from sister company Hong Kong Airlines.

It will start flying to Sabah, Malaysia, and the mainland cities of Kunming and Chongqing.

Hong Kong is not a typical market for low-cost carriers as it does not have a budget terminal and labour costs are high.

Cowen said the absence of low-cost carriers from Hong Kong made the city an expensive place to fly to and from.

Ninety-four airlines fly to Hong Kong. Ten are budget carriers. The penetration rate of the budget carriers is 5 per cent of capacity.