The Cathay Pacific Group looks set to exit five cities in mainland China. A recent update from the Civil Aviation Administration of China gives the airline group the right to fly to more than 15 cities in mainland China. But the previously served cities of Jinan, Kunming, Changsha, Guilin, and Nanning are missing from the list.

Not all bad news for Cathay Pacific

As reported by Danny Lee in Hong Kong’s The South China Morning Post, these airports were served by Cathay Pacific’s regional airline, Cathay Dragon.

Cathay Pacific announced it was winding up Cathay Dragon with immediate effect in October 2020. At the time, Cathay Pacific said it and another subsidiary, HK Express, would take over most of Cathay Dragon’s routes.

Despite dropping five destinations, The South China Morning Post report suggests the recent Civil Aviation Administration of China decision was a positive outcome for the Cathay Pacific Group. Given the travel downturn, the financial turbulence at Cathay Pacific, and their sometimes strained relationship with the mainland Chinese Government, rights to fly to 15 plus cities in mainland China is not a bad outcome.

With the new Civil Aviation Administration of China decision, Cathay Pacific and HK Express can fly to Fuzhou, Qingdao, Xiamen, Guangzhou, Zhengzhou, Hangzhou, Xi’an, Wenzhou, Ningbo, Haikou, Sanya, Chongqing, Chengdu, Wuhan, and Nanjing. That’s in addition to existing rights to fly to headline cities such as Beijing and Shanghai.

Upstart Greater Bay Airlines plans to move into Cathay Dragon territory

Danny Lee’s report touched on another interesting development in Hong Kong – the emergence of upstart new airline Greater Bay Airlines. Interestingly, the Greater Bay Airlines CEO is Algernon Yau. Until December 2020, Mr Yau was CEO at Cathay Dragon. When Cathay Pacific announced the closure of Cathay Dragon last October, they also said 5300 Hong Kong-based employees would lose their jobs.

Algernon Yau appears to have landed on his feet, snagging the top Greater Bay Airlines job in January. Since news of the new airline broke in 2020, Greater Bay Airlines has struck a bullish tone. The airline will start small in mid-2021, with just a handful of aircraft and a few hundred employees. But they have big plans. Greater Bay Airlines aims to multiply those numbers ten-fold by the middle of the decade.

Big plans by new Hong Kong airline

Just two weeks ago, Hong Kong’s Air Transport Licensing Authority published details of Greater Bay Airlines’ application to fly over 100 routes, primarily using Boeing 737-800 aircraft. A lot, but not all of those routes are in mainland China. The application also covers flights to 13 cities in Japan and six cities in Thailand, among other cities.

Many of the destinations Greater Bay Airlines has applied to fly to are former Cathay Dragon destinations. In the run-up to the travel downturn, Cathay Dragon commanded approximately 16% of airline passenger traffic in and out of Hong Kong. The airline flew to 59 destinations in 11 countries in the region and employed over 1,100 people.

Potentially, it’s a tasty piece of business for Greater Bay Airlines, especially the traffic between the second and third-tier mainland Chinese cities and Hong Kong. As a former Cathay Pacific alumni and Cathay Dragon CEO, Algernon Yau will know exactly what routes to target and where the opportunities are.

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