New look HK Express focuses on regional growth

Hong Kong Express is expanding its network across East Asia, following its repositioning as Hong Kong’s first low-cost carrier.

In an interview with Travel Daily on Thursday, HK Express’ deputy CEO, Andrew Cowen, revealed plans for a significant increase in the airline’s fleet and route network in the coming years, following its rebranding and move to an LCC model.

A distinctive new livery, which will adorn its entire fleet of Airbus A320s, features a silhouette of the Hong Kong skyline. And according to Cowen, this represents the airline’s aim: to serve the needs of Hong Kong citizens.

“We are focused on the Hong Kong market and fly where Hong Kong people want to go,” Cowen said. “Previously we focused on the inbound market from mainland China, so we have completely switched out customer focus. We will now serve the needs of more price sensitive Hong Kong travellers.”

HK Express currently serves 10 Asian destinations: Taichung, Kunming, Phuket, Chiang Mai, Penang, Kota Kinabalu, Seoul, Osaka, Penang and Tokyo. And Cowen said he would continue to expand in three key areas: Northeast Asia, Southeast Asia and mainland China. This expansion will be facilitated by the delivery of new A320 aircraft.

“Currently we have five aircraft supplying eight destinations, and our sixth will arrive in the coming weeks, allowing us to launch flights to Fukuoka and add capacity to Seoul. A seventh aircraft will then be delivered in May, entering service in June. We are currently finalising the plan for this, and expect to announce some exciting destinations,” Cowen said.

When asked if new emerging destinations, including Myanmar and Cambodia, were in the pipeline, Cowen said that he is “very interested in these markets”, but said there were “practical aspects” to consider, such as traffic flows on both sectors of the route.

But there will be significant growth opportunities in several areas in the coming years, as HK Express continues to add new aircraft to its fleet. The airline expects to reach a fleet size of 10 aircraft by the end of 2014, which it will use to serve 20-25 destinations. This will then expand to 16-18 A320s the following year, serving 30-40 destinations.

By this time, HK Express is likely to be joined in the market by Jetstar Hong Kong. And while Cowen said he wasn’t overly concerned about the competition, he said there could be issues involving capacity at Hong Kong International Airport.

“Hong Kong is very competitive already. There are 17 low-cost carriers operating here, so we certainly don’t have a nice cosy monopoly. What we’re more concerned about is capacity; it’s about getting the right slots at times that allow us to operate a full schedule.”

But with the best on-time performance of any Hong Kong-based airline, and fares 50-70% lower than “incumbent carriers”, HK Express appears to expanding from solid foundations.