2019 has been a difficult year for a number of airlines. Hong Kong Airlines is one of them. The recent reduction in tourist numbers coupled with intense competition from Cathay Pacific has put the carrier’s ambitions on ice as survival is the first goal for the airline. Let’s take a look at Hong Kong Airlines’ troubles.
Recent unrest in Hong Kong
Hong Kong Airlines, most recently, has seen declining numbers of travelers as unrest in Hong Kong deters people from traveling. Although Hong Kong Airlines was not the only airline to receive negative effects as a result of this, Hong Kong Airlines was hit fairly hard because, unlike Cathay Pacific, the airline does not have a strong network for connecting passengers.
The end of long-haul routes
Hong Kong Airlines recently announced the airline would be ending all long-haul services. Long-haul routes can either be incredibly profitable for an airline, or they can be a huge loss-maker. For Hong Kong Airlines, it seems loss-maker is where it landed. Ultimately, Hong Kong Airlines relied significantly on origin and destination passengers over connections.
The end of inflight entertainment on Hong Kong Airlines
In another cost-cutting move, Hong Kong Airlines is making a move towards ending inflight entertainment. These services can come at an immense cost to an airline. And, with the lack of long-haul services, management seemed to deem that this is not as important for Hong Kong Airlines to offer passengers.
Moving aircraft into storage and delayed salary payments
An Airbus A350 for Hong Kong Airlines recently entered storage. The airline apparently deemed it costlier to fly the aircraft than to store it. This move would make sense if the airline does not want to continue with long-haul flights and such a large aircraft would be difficult to fill on some competitive short-haul routes.
The airline also moved to delay salary payments for around 1,600 of its staff members. Furthermore, the airline also incentivized foreign pilots to leave the carrier in yet another attempt to reduce costs.
What does all of this mean?
Hong Kong Airlines is in trouble. This kind of trouble does not come cheap. As of now, the carrier is still flying. However, it is unclear exactly how much more trouble the airline can endure before it finally succumbs to all of these pressure. The success or failure of Hong Kong Airlines could also prove whether or not Hong Kong can sustain two independent airlines given Cathay Pacific’s long-standing dominance.
What do you make of the situation at Hong Kong Airlines? Let us know in the comments!