Hong Kong Airlines once again wants to expand by launching long haul flights, after that strategy nearly liquidated the airline back in 2019…
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Hong Kong Airlines eyes North America flights
Hong Kong Airlines CEO Jeff Sun Jianfeng has stated in an interview with Bloomberg that the airline intends to once again launch long haul flights as of 2025.
Specifically, the airline wants to acquire at least three secondhand Boeing 787s, and use those for this service. As far as destinations go, North America is clearly the target, and the airline is evaluating the possibility of service to Los Angeles (LAX), Seattle (SEA), Toronto (YYZ), and Vancouver (YVR).
Now, for some background on Hong Kong Airlines, the carrier currently has a fleet of 21 Airbus planes, comprised of A320 and A330-family aircraft, which are primarily used for flights within Asia. However, the airline used to be much bigger… well, briefly.
In 2017, the company began a huge expansion push, whereby the airline took delivery of Airbus A350s, with the goal of becoming a truly global airline. The airline ended up launching flights to the United States, including to Los Angeles and San Francisco. I even had the chance to review Hong Kong Airlines’ A350 business class.
Well, that service lasted for all of a couple of years, and by early 2020, the carrier ended all long haul flights, and dumped its A350s.
Hong Kong Airlines had been hemorrhaging money on its’ long haul flights. It also didn’t help that Hong Kong Airlines’ parent company, HNA Group, wasn’t exactly in a good financial spot either.
For many months, the airline was teetering on the brink of liquidation, to the point that it couldn’t even pay its staff during some periods. Fortunately the airline managed to restructure, and has shrunk back into profitability. The airline has gone from having over 50 planes, to having just 21 planes.
Does Hong Kong Airlines’ strategy make sense?
Is there any merit to Hong Kong Airlines relaunching long haul flights, when that effort nearly ran the airline out of business several years back?
I’m generally skeptical, given how poorly this worked out the first time around. It’s notoriously difficult to make money on ultra long haul flying, especially when you’re not the dominant business airline, with the bulk of corporate contracts. Hong Kong Airlines would struggle to get high yield business travelers, since the airline just won’t have the schedule, frequencies, or existing relationships, of Cathay Pacific.
Making money on these kinds of routes off leisure travelers, especially as a non-preferred airline, isn’t going to be easy. We’re back to seeing sub-$700 roundtrip fares from the United States to Hong Kong, and that’s not going to make airlines any money.
Now, Asia is in a weird spot when it comes to aviation, given the extent to which Mainland China’s international travel demand just hasn’t recovered. This is a blessing and curse for airlines, since airlines from Mainland China are operating much smaller international schedules than pre-pandemic.
It means that a lot of travelers from Mainland China are routing through other hubs. At the same time, there also just aren’t as many of them.
To Hong Kong Airlines’ credit, perhaps starting with used 787s would give the airline a better cost structure than flying with brand new A350s. Though the specific mention of 787s makes me wonder — has the airline already sourced these jets, because it’s a bit surprising to see an all-Airbus operator go this direction?
My gut tells me that this strategy probably doesn’t make any sense, and exposes the airline to an unnecessary amount of risk, with limited upside. Is it possible this ends up being mildly profitable? Maybe. But I doubt it’ll be a goldmine.
At the same time, I have to hope that executives at the airline know something I don’t, and aren’t just trying to run the airline into the ground again?
Bottom line
Hong Kong Airlines is planning on resuming long haul flights, and is considering four destinations in North America. The airline plans to launch these flights with used Boeing 787s as of 2025. I’m skeptical of this plan, given that the airline tried this before, and it ended horribly.
Could this work out better, with a lower structure, and a fundamentally different industry? Or is the airline setting itself up for failure again?
What do you make of Hong Kong Airlines’ long haul growth aspirations?
Interesting, it's great to have more competition on trans-Pacific routes.
Back when they were operating to SFO, competition meant that I was able to book a roundtrip on United for around $300.
I’ve lived in HK for 14 years. Took HK airlines for the first time in several years to phuket recently. Absolutely the worst airline I’ve ever flown (save Ryanair).
Nothing about Hong Kong airlines makes sense. No alcohol sales and no alcohol served. Food offering was… a bun. A bun on a 3 hour flight. Even domestic US would giggle at that.
Cabin temp of 26C.
Takeoff delays.
It’s like they are trying to own...
I’ve lived in HK for 14 years. Took HK airlines for the first time in several years to phuket recently. Absolutely the worst airline I’ve ever flown (save Ryanair).
Nothing about Hong Kong airlines makes sense. No alcohol sales and no alcohol served. Food offering was… a bun. A bun on a 3 hour flight. Even domestic US would giggle at that.
Cabin temp of 26C.
Takeoff delays.
It’s like they are trying to own a space that just doesn’t exist. Not “budget” (didn’t have to pay for my cabin bag) and nowhere near premium.
If this airline isn’t bust within 5 years, I’ll eat my shorts on live tv.
Literally every other airline on the HKG to HKT route (cathay, air Asia, HK express), is superior.
Great to hear about Hong Kong Airlines eyeing North America! This expansion could bring more choices and convenience for travelers across the Pacific.
Hopefully not the RR powered ones
Source the 78s from parent Hainan? They've got lots. Could probably just lease them pretty cheaply, and return them if it doesn't work out.
Makes sense.
Did they not just announce flights to Gild Coast in Australia for one month in January? :)
When did Hong Kong - USA become "ultra long haul" flying?
Maybe not the west coast but YYZ is 15 hours and JFK is 16 hours.
Cathay clearly remarked that they will veto Hainan’s proposal to join Oneworld if they keep HX. Given Guangzhou’s location, it’s also unlikely to have CZ in. HX’s seat product can’t compete with CX’s current product, not to mention service. Just not sure why Hainan Group is so obsessed with an airline in HK.
It is similar to how Chinese people is obsessed with Hong Kong/Tibet/Taiwan
@Jason when I flew with Hong Kong airlines in business class I had much better service from them than Cathay Pacific. The service felt much more professional and personable and not so robotic. Also, they use Eva for their ground services in Taipei and I also think that Hong Kong airlines ground service is much better than Eva. HX may be a much smaller airline compared to CX and BR but they are much more...
@Jason when I flew with Hong Kong airlines in business class I had much better service from them than Cathay Pacific. The service felt much more professional and personable and not so robotic. Also, they use Eva for their ground services in Taipei and I also think that Hong Kong airlines ground service is much better than Eva. HX may be a much smaller airline compared to CX and BR but they are much more upbeat and welcoming. It would be nice to fly with Hong Kong airlines again.
Opposite for me, I actually found Cathay to have better service over Hong Kong Airlines.
It could work if they don’t sell business class to Vietnam for $700 roundtrip ;)
Makes sense to me if they want to give it a go again. Maybe Covid worked against them. But…2nd hand Dreamliners are way cheaper than new A350’s, or any thing else for that matter. Also, a used 787 is probably a whole lot quicker and easier to get their hands on than waiting for a brand new one with delivery dates out a bit. Hopefully it’ll work for them.
It could work on some routes because the landscape is different than pre-Covid. Cathay is not back to Seattle, for example, where there was arguably a market before, and Air Canada is not back to flying Toronto-HK direct, which means the Cathay flights have been pricier than usual with no competition. And there is *massive* diaspora demand from Toronto.
the final destination of the passengers on the plane is Stanley prison in commie hk
SEA could actually be a good idea. It's the only market that doesn't have nonstop service to HKG from the ones they're looking at.