SINGAPORE, 20 March 2019: Cathay Pacific believes that buying the low-cost carrier, Hong Kong Express Airways, could help it capture a market segment currently beyond its reach.
Wire service Reuters quoted the airline’s chief executive Rupert Hogg on Monday saying that it would give the airline a “unique market segment that it does not capture at present.”
Earlier the airline hinted it was in “active discussions” to acquire the low-cost airline controlled by HNA Group.
Cathay Pacific posted HKD2.3 billion profit for 2018 as the Hong Kong airline turns a corner financially. In the 2018 annual report, Cathay Pacific showed measures to cut costs and boost revenues had borne fruit, ensuring it generated an HKD2.34 billion (USD293 million) annual profit and halting two years of back-to-back losses.
But just last week the executives remained tight-lipped about a bid to buy HK Express. That appears to be changing as the airline ponders the pros and cons of getting into the low-cost airline market.
“It does interest us,” Hogg told Reuters when asked about the budget airline sector during an interview in Singapore.
“We watch Singapore Airlines and Scoot; we can see they are trying to get connectivity between them.”
But the airline remained non-committal on negotiations preferring to keep a lid on the status of talks to acquire Hong Kong Express.
However, Hogg did confirm he was cautiously optimistic about 2019 saying the airline would grow capacity 6.9% this year.
(Source Reuters and South China Morning Post. See: