Hong Kong Express Airways Plans 12 New Destinations by Year-end

Hong Kong Express Airways Ltd., backed by China’s HNA Group, plans to expand its flight network to 20 Asian cities this year, as it seeks to lure more cost-conscious passengers from Cathay Pacific Airways Ltd. (293)

The budget carrier will add 12 destinations, including Seoul in South Korea, Deputy Chief Executive Officer Andrew Cowen said in Hong Kong today, declining to identify other cities. It will more than double its fleet to 11 Airbus Group A320s by the end of 2014 from five aircraft now, he said.

Hong Kong Express will add to the challenges Cathay Pacific faces in maintaining its 50 percent share of passengers flying out of China’s financial hub. Hong Kong Express has flown almost 200,000 passengers since converting into a budget airline from a regional carrier in October.

“We’ve been able to get good savings as we transform to a low-cost model,” Cowen said. “We’re still on track to break even and be a little more profitable for this year.”

Hong Kong Express will offer daily flights to Seoul’s Incheon airport by the end of March, Cowen said. It already flies to eight cities including Osaka, Kunming and Phuket.

Jetstar Hong Kong Airways Ltd., a joint venture by Qantas Airways Ltd. (QAN), China Eastern Airlines Corp. and Shun Tak Holdings Ltd., is still waiting for an operating license. The Hong Kong government has said it won’t process applications from new airlines until it completes a review of criteria for designating local carriers.

“The delay has been great for Hong Kong Express” as they now have a very visible low-cost carrier brand, said Will Horton, an analyst at CAPA Centre for Aviation. “But from a consumer perspective, it’s better to have more competition.”

To contact the reporter on this story: Rachel Butt in Hong Kong at rbutt4@bloomberg.net

To contact the editor responsible for this story: Hwee Ann Tan at hatan@bloomberg.net

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