HK Express boss says long-haul LCCs financially viable

The CEO of Hong Kong budget airline HK Express, Andrew Cowen, says he does not think the fixed assumption that low-cost long-haul-carriers (LCCs) are financially unviable is correct.

His comments come as Singapore-based LCC Scoot began operating its new four-times-weekly Singapore-Athens route earlier this week, using a new B787-8 Dreamliner it received last month. Meanwhile, the UK-based arm of budget carrier Norwegian announced in April it would begin non-stop flights between London and Singapore starting this September.

Speaking to Business Traveller Asia-Pacific, Cowen said: “It is certainly true that the long-haul LCC pioneers have struggled with profitability, but that was true for the short-haul LCC pioneers also, who took some years to refine the LCC business model.

“There are vast numbers of price-sensitive travellers who enjoy travelling on low-fare, short-haul flights and have the desire to travel further, if only they could find lower fares and the ability to shape their journey to suit themselves with the choices LCCs provide.”

In the past, flights exceeding eight hours have tended to be seen as a “no go” area for low-cost models. Scoot’s new Athens service takes 11 hours 30 minutes, while Norwegian’s upcoming Singapore service is expected to take 12 hours and 45 minutes, according to The Independent.

Back in March, Qatar Airways CEO Akbar Al Baker said the threat from low-cost LCCs is short-term, stating: “It doesn’t work. They will not succeed.”

Meanwhile Malaysia Airlines boss, Peter Mellew, said that low-cost LCCs will always be small-scale, and that any increase in the price of oil will cause them difficulty. “It consumes vast amounts of column inches in the newspaper because if people advertise these low fares it makes a big splash, but the economics don’t make sense,” he said in a recent interview with Business Traveller.

Despite this, Cowen says the demand for and strength of LCCs is growing. “Legacy carriers have always downplayed the threat of LCCs, yet FSC (full-service carrier) market share has nonetheless been reducing in favour of LCC market share growth for decades in almost all geographies. I see long-haul LCC as a boon as through interline connection with regional LCCs, offering a far greater choice of low-fare destinations to travellers.”

And while HK Express itself currently does not operate low-cost routes, Cowen isn’t ruling out the possibility, saying that long-haul low-cost flights is “certainly something HK Express is interested in given the huge demand for low fares in the Hong Kong and Pearl River Delta region” – though for the time being the airline is focused on expanding its short-haul fleet and network over the next 18 months.

HK Express is also a founding member of the U-Fly Alliance, which comprises only LCCs. Chinese carrier Lucky Air, a U-Fly Alliance member, currently operates long-haul flights to Moscow – it began a new service on June 12 this year from Kunming that takes 10 hours and 10 minutes. “I have no doubt that more long-haul LCC routes will follow,” said Cowen.

Not all LCCs are as optimistic as HK Express, however. Earlier this week, Malaysian LCC Air Asia X CEO, Tony Fernandes, said that it the airline had decided not to pursue a return of its Europe services – which it cut in 2012 – and its previously targeted expansion to the US mainland.

In a series of tweets, the Air Asia X boss said, “We have decided that ultra-long haul is not relevant now. Won’t get seduced into price wars over London.

“We will stick to the 8 or 9 hours. Our focus will be to Asia with the odd route to Hawaii, which is actually 8 hours from Japan.

“We let the full-service guys fight it out over Europe. Many of them bleeding so much.”

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Virgin Australia eyes flights to Hong Kong

Hong Kong skyline

Virgin Australia will begin flying direct to Hong Kong starting mid-2017, following the announcement of a proposed alliance agreement with HNA Aviation – which operates the mainland Chinese carrier Hainan Airlines – Hong Kong Airlines and low-cost carrier HK Express. The airlines today submitted an application for authorisation to the Australian Competition and Consumer Commission to gain approval for the alliance.

The agreement will also see the introduction of codeshare agreements on flights between Hong Kong and Australia, as well as mainland China and Australia. Virgin Australia also announced it plans to begin operating direct flights from Australia to mainland China “in further stages of the agreement”.

Currently, all Virgin Australia flights to Hong Kong and mainland China travel via Singapore and are operated by its flag carrier, Singapore Airlines.

Virgin’s new direct Hong Kong flights will be operated by Airbus A330 aircraft, which are currently equipped with its “The Business” business class offering. Travellers flying to Hong Kong will then be able to connect with Hong Kong Airlines’ mainland China flights.

Meanwhile, customers travelling with Beijing Capital Airlines, Hainan Airlines, Hong Kong Airlines and Tianjin Airlines will be able to connect to Virgin Australia’s domestic and trans-Tasman flights.

“This new alliance will be a game changer for travel between Australia and China, providing significantly more competition and choice for travellers,” said Virgin Australia group CEO, John Borghetti. “The alliance will accelerate and support our access to the Chinese market, which is Australia’s fastest growing and most valuable inbound travel market.

“HNA Aviation fly nearly 100 million passengers each year and we look forward to working collaboratively with them to drive inbound visitation to Australia, resulting in significant benefits for the Australian tourism industry and broader economy.”

In addition to new routes and codeshares, the alliance will see members of Virgin Australia’s Velocity Frequent Flyer and Hong Kong Airlines’ Fortune Wings Club loyalty programmes able to accrue miles on alliance routes, along with receiving reciprocal access to tier benefits. These include lounge access, priority check in and boarding, and additional baggage allowance.

The past few months have seen a slew of new routes connecting Hong Kong and mainland China with destinations in Australasia, including Hainan Airlines’ new Shenzhen-Auckland service, Hong Kong Airlines’ flights to Auckland and the planning of a new Tianjin Airlines Chongqing-Melbourne route.

China Eastern also recently launched flights between Sydney and Wuhan, and Shanghai and Brisbane, while Qantas’ Beijing-Sydney route took off in late January.

virginaustralia.com; hkairlines.com; hkexpress.com; hainanairlines.com

HK Express begins direct Saipan service

HK Express Saipan Route Launch

Holidaymakers flying out of Hong Kong can now fly direct to the Northern Marianas island of Saipan, following the launch of a new three-times-weekly service by budget carrier HK Express.

The new flights depart Hong Kong in the evening, arriving early the following morning in Saipan. Return journeys depart at 0140 and arrive back in Hong Kong early morning at 0500.

The route’s inaugural flight departed Hong Kong on Tuesday, January 17 with passengers receiving giveaways at the boarding gate and being welcomed by the Marianas Visitors Authority upon arrival in Saipan.

“These thrice-weekly flights will provide a new option for tourists from Hong Kong, mainland China, Myanmar, Thailand, Cambodia, Vietnam, Taiwan, Japan and South Korea who may be interested in visiting Saipan, Tinian or Rota,” said the authority’s managing director, Christopher A. Concepcion.

“And vice versa, this new regularly scheduled service by HK Express will provide additional flight options for our people in the CNMI who wish to travel to nearby Asia for vacation or business.”

Located close to Guam in Micronesia, Saipan is known for its beaches and blue waters offering attractive snorkelling opportunities.

HK Express’ introductory offer includes single-way fares of HK$799 (US$103) including taxes and fees until February 17 for travel until July 13.

Full details of the flights are as follows (all times local):

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HK Express launches U-Biz business travel service

HK Express' new U-Biz platform

Hong Kong-based low-cost carrier HK Express has launched a new U-Biz service for corporate travellers. Membership to the new platform is free and can be signed up to online, and offers business travellers perks such as free seat selection, same-day flight changes, priority check-in and early boarding.

The membership allows travellers to cancel flights up to seven days in advance – though fees apply and guests receive a refund in the form of a voucher – and reschedule up to three hours prior to departure. Members also have a checked baggage allowance of 30 kilograms, can check in 50 minutes before scheduled departure time, receive in-flight meal credits valued at HK$25 (US$3.2) per flight, and earn double points with the carrier’s frequent flyer programme, Reward-U, on every flight they book through U-Biz.

“We’ve seen a growing interest from the business community in Asia, who are looking for affordable flights and great service without the hidden costs of full-service carriers,” said HK Express commercial director, Luke Lovegrove. “As a frequent flyer myself, I understand the needs of business travellers. We’re thrilled to offer flexibility, efficiency and comfort at low fares – all designed with our corporate guests in mind.”

Lovegrove added that additional perks, including extra cabin baggage, will be rolled out to U-Biz members in the coming months.

The new platform follows recent announcements from the airline including receipt of its first Airbus A321 and A320neo aircraft, the latter of which is being deployed on the carrier’s Osaka-Kansai route this month and will be deployed to Tai Chung and Kagoshima in January 2017.

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HK Express receives first A320neo

HK Express welcomes the first A320neo

Hong Kong low-cost carrier, HK Express, received its first Airbus A320neo aircraft on Monday (December 12), marking the debut of the new aircraft to the North Asia region.

The delivery of the A320neo – the 18th aircraft to join the carrier’s fleet – follows the airline’s receipt of its first A321 in late October, which has been deployed on its Chiang Mai route. (Business Traveller Asia-Pacific recently reviewed HK Express’ A320-200 service on this route)

The two aircraft are part of an order for a further 11 A320neos and ten A321s the carrier currently has placed with Airbus. HK Express expects to receive its second A320neo in the beginning of 2017.

“We’re very pleased that HK Express continues to expand its fleet with our latest A320neo, which offers unmatched passenger comfort, fuel efficiency and economics,” said Airbus China president, Eric Chen. “We are confident that this aircraft will complement HK Express’ existing fleet and further their success in the region.”

The A320neo features a range of eco-friendly features, including low fuel burn (partly due to its aerodynamic 2.4-metre-tall wing tips dubbed “sharklets”), low emissions and quiet engines, and also offers a longer flight range.

The Hong Kong carrier has named its new aircraft “Shark”, highlighting the aircraft’s more eco-friendly features and the airline’s stance against the shark fin trade. In-flight donations to the Hong Kong Shark Foundation will be collected on the A320neo between January 1 and 31, 2017.

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HK Express begins first direct Hong Kong-Chiang Rai service

The launch of HK Express' new Hong Kong-Chiang Rai twice weekly route

Low-cost carrier HK Express launched its new non-stop service between Hong Kong and Chiang Rai in the north of Thailand last week, the first such direct service between the two destinations. The route’s inaugural flight departed Hong Kong International Airport in the afternoon on Friday, November 25.

HK Express’ new service operates twice a week on Monday and Friday at two different times. The carrier’s Monday service departs Hong Kong at 1345 and arrives at Chiang Rai International Airport (CEI) at about 1550 local time. The Friday service, meanwhile, operates approximately 40 minutes later. The return journey, however, departs CEI at 1635 on Monday arriving back in Hong Kong at 2005, while the Friday return leg operates 30 minutes later.

Speaking about the new service, Sarima Chindamat, director of the Tourism Authority of Thailand, Hong Kong, said: “We have confidence Chiang Rai will become one of the most popular Thai destinations for Hong Kong tourists and this new direct flight service will be significant in securing a strong foothold in between Hong Kong and Thai tourism.”

Prior to the direct service, travellers to Chiang Rai have been required to transit in Bangkok or take a long bus journey from Chiang Mai, also in Thailand’s north. The city is known for its Lanna Kingdom cultural heritage, and includes numerous temples including the Wat Rong Khun “white temple”.

To mark the start of the new route, HK Express is offering an introductory offer of one-way fares starting from HK$248 (US$32) on purchases made before December 25. The introductory fares are applicable for travel until July 13, 2017.

Earlier this month, the Hong Kong carrier received its first A321 aircraft, which was deployed on its Chiang Mai route, preceding a further 23 new A321s and A320neos the airline also currently has on order. Meanwhile, new routes to Hualien in Taiwan and Guam are set to begin on December 6 and 15 this year, respectively, with a service to Saipan – the largest of the Northern Mariana Islands, is set to begin January 17, 2017.

Details for the new Hong Kong-Chiang Rai service are as follows (all times local):

Flight No.FromToDepartsArrivesDays
UO3750Hong KongChiang Rai13451550Monday
Hong KongChiang Rai14301630Friday
UO3751Chiang RaiHong Kong16352005Monday
Chiang RaiHong Kong17052035Friday

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HK Express receives its first A321

HK Express receives its first A321

Hong Kong-based LCC, HK Express has taken delivery of its first Airbus A321, its 16th aircraft in total with a further 11 A321s and 12 A320neos currently on order.

The new aircraft was received on Saturday and had its inaugural flight yesterday travelling to Chiang Mai. The A321 will then be deployed on different routes according to the airline’s roster in the future.

An all-economy aircraft, HK Express’ new A321 includes a total of 230 seats – the first carrier in North Asia to offer a 230-seat configuration – in a three-three set up, 50 seats more than the A320 the carrier currently uses. The cabins also feature all new interiors with more ergonomic seats offering a pitch of 30 inches.

Speaking about the new aircraft deliveries, Andrew Cowen, director and CEO of HK Express, said: “Almost all our aircraft are new or nearly new, so that gives us a very young fleet age. What that means for passengers is that it’s very clean, very new and very modern, and of course it’s very safe. We have 23 more aircraft on order coming into our fleet over the next few years. With each aircraft we fly approximately two destinations, so when we are up to 40 aircraft that means we are flying to somewhere between 60 to 80 destinations across Asia.”

The delivery comes as the carrier marks its third anniversary. To celebrate the occasion, HK Express will be launching an online “musical chairs” game on its website on November 3, where customers can play online together with other passengers to win seats. The first 50 people to grab a seat on the screen will win a round-trip flight to a surprise destination. The competition will run until November 7 at 23:59 with a new game every day, resulting in a total of 250 tickets available across the five-day period. A grand prize of a four-day, three-night trip to Chiang Mai with flights and hotel included, as well as reward-U points will also be up for grabs.

Meanwhile, HK Express is also offering a buy-one-get-one-free deal for those traveling in pairs or multiples of two. The offer is available for bookings made between November 1 to 3, for flights between November 16, 2016 and March 25, 2017 to most destinations in the carrier’s network.

hkexpress.com