Hong Kong Airlines scraps Auckland flights and turns back on long-haul services to focus on more profitable Asian destinations
- Embattled carrier says flights to New Zealand cut from May 22, as part of ‘adjustments to its business strategy’
- Hong Kong’s third-biggest carrier also pulled out of Australia market in 2018, cancelling flights to Cairns and the Gold Coast
Hong Kong Airlines is to axe flights to New Zealand as it rolls back on loss-making long-haul services in favour of more profitable Asian destinations.
The airline said it would add a fourth daily flight to Beijing from April 14, returning to its more traditional focus on Asian destinations which preceded its failed foray into intercontinental flying.
The airline said on Thursday it would continue to study the market closely and explore opportunities to launch new destinations.
Before it began its focus on long-haul flights, Hong Kong Airlines was making enough money to hand out annual bonuses worth three months’ salary companywide.
Unfortunately, long-haul expansion for smaller Asian airlines is often more about prestige than profitability
That prompted authorities to twice question the airline’s financial health, demanding an explanation and clarification.
CAPA Centre for Aviation chief analyst Brendan Sobie on Wednesday said: “Unfortunately, long-haul expansion for smaller Asian airlines is often more about prestige than profitability.
“There are so many opportunities to grow within Asia that are less risky and more viable.”
Independent Hong Kong-based aviation analyst Will Horton tweeted the carrier had to make choices. It “can’t sustain every loss”, he wrote, adding: “Hopefully [it] means another step in [the] turnaround.”
He added the company’s long-term opportunity was in the North America market.
Meanwhile, the airline said its new training headquarters at the airport, the Hong Kong Airlines Aviation Training Centre, was granted an occupational permit to open in July 2019.
Newly installed chairman Hou Wei said: “As one of the fastest-growing carriers in the world, we are confident of our future and are committed to sustaining our long-term growth.”
The centre will include 12 aircraft simulators and a 25-metre swimming pool for training purposes and cabin mock-ups of different aircraft models.
The airline operates 38 passenger planes to 37 destinations.
