HONG KONG: Hong Kong Airlines To Seize Hong Kong-San Francisco Flights October 5

Hong Kong Airlines will stop its Hong Kong-San Francisco service from October 5 this year, less than two years after first launching the service.

The decision comes following a review of its network and a change in business plan for USA market, the airline said in a statement published on its website.

The final flights between Hong Kong and San Francisco (HX60 and HX61) will be operated on October 4 this year. Passengers who have bought tickets for Hong Kong-San Francisco flights beyond that date will be offered alternative arrangements.

They can change the departure date for flights between the two cities for free before October 5, while those who decide to cancel their flights will get a full refund.

Passengers are also eligible for a free change to any destination that Hong Kong Airlines flies to though applicable fare and tax differences may apply, or a free transfer to other partner carriers which will be arranged by Hong Kong Airlines but subject to availability.

Hong Kong Airlines first launched this route in March 2018 and it currently flies this route four times a week.

The carrier will reduce the frequency of the service to three times weekly (Monday, Wednesday and Friday) starting from August 31, with its Sunday service cancelled.

Affected passengers can find contact details for Hong Kong Airlines’ customer assistance.

Hong Kong Airlines is not the only carrier that flies non-stop between Hong Kong and San Francisco: Cathay Pacific operates this route three times daily; United Airlines has recently announced that it will add a second non-stop service between the two cities from October.

Singapore Airlines also flies daily between Hong Kong and San Francisco, though it should be noted that the flight (SQ2) is actually a direct service between Singapore and San Francisco, with a stopover in Hong Kong.

In addition to San Francisco, in the North American market Hong Kong Airlines also operates long-haul flights to Vancouver and Los Angeles.

Hong Kong Airlines is a subsidiary of HNA Group, a Chinese conglomerate which is facing huge debts and a financial crisis. HK Express, once a subsidiary carrier of HNA Group, was fully acquired by Hong Kong flag carrier Cathay Pacific this month.

Ricky Chong Wai-ki, director of corporate governance and development of Hong Kong Airlines, said the airline had not ruled out a complete cut of long-haul flights in an interview with Hong Kong-based newspaper the South China Morning Post in June.

For North American flights, even airlines like Cathay face a lot of pressure so we keep reviewing. Our North American flights will be our short-term focus that we need to consolidate, said Chong.

Meanwhile, Hong Kong Airlines has also announced that it will discontinue its Hong Kong-Fuzhou service from September 2, while it will boost flights to three short-haul destinations.

The carrier will add a daily flight between Hong Kong and Haikou from September 2, four additional weekly flights between Hong Kong and Hangzhou from September 8 and two additional weekly flights between Hong Kong and Sapporo from September 28.

The arrangements will bring the total number of its Haikou, Hangzhou and Sapporo services to three daily flights, 14 weekly flights, and 11 weekly flights, respectively.

Last month, the carrier rolled out a series of new amenity kits for its business class passengers travelling on long-haul flights to North America.


Tourism Observer

HONG KONG: Hong Kong Airlines Launches Flights to Moscow, Russia

Hong Kong Airlines has launched non-stop flights connecting Hong Kong with Moscow.

The new seasonal service, which will operate thrice weekly, marks the airline’s entry into Europe.

Hong Kong Airlines Vice Chairman Mr Tang King Shing said: Hong Kong Airlines is proud to be the only Hong Kong based carrier operating a direct service to Moscow.

Hong Kong and Russia have enjoyed a strong bilateral partnership as seen in the visa-free arrangements for travel between the two destinations.

Our new service will provide more choice and greater convenience as more travellers look to Russia for a holiday getaway.

The internationally-acclaimed full-service airline Hong Kong Airlines announced that it will add frequency of its flight service to Osaka to two flights daily and that to Sapporo to one flight daily.

The arrangement is believed to meet the growing travel and trade demand between Hong Kong and the two cities, further strengthening the airline’s network in Japan.

Mr. Li Dianchun, Chief Commercial Officer of Hong Kong Airlines, said, The Japan destinations have been quite popular among Hong Kong Airlines’ passengers.

Satisfying response has been received since the commencement of flight service to Sapporo and Osaka in December, in view of which we have been proactively exploring to add frequency to these routes so as to meet the travel demand of our passengers.

In addition, Hong Kong Airlines will launch its flight service to Yonago soon on 14 September, bringing more travel choices for the passengers.

Hong Kong Airlines currently flies to over 30 destinations in the Asia-Pacific region. With the upcoming flight service to Yonago and the additional flight service to Osaka and Sapporo, by then Hong Kong Airlines will operate a total of 60 weekly flights.

The flights between Hong Kong and Japan, including two daily flights to Okinawa, Tokyo and Osaka respectively, one daily flight to Sapporo and five-time weekly service to Kagoshima, as well as twice-weekly flights to Miyazaki, Okayama and Yonago respectively.

Hong Kong Airlines will then have 8 flight destinations in Japan, which represents a further upgrade of its destination network in the country.

Established in 2006, Hong Kong Airlines is a full-service airline firmly rooted in Hong Kong with a wide destination network covering over 30 major cities across the Asia Pacific region, including Gold Coast, Beijing, Shanghai, Taipei, Tokyo, Sapporo, Bangkok, Bali and Okinawa.

The current operating fleet is made up of 32 Airbus aircraft with an average age of around 3.9 years, consisting of 27 passenger aircraft and five freighters, being one of the youngest fleet in the world.

Hong Kong Airlines has been awarded the internationally acclaimed 4-star rating from Skytrax since 2011.

Adhering to the concept of Fresh and Very Hong Kong, Hong Kong Airlines is committed to Bringing Greater Journeys Sky High, and is dedicated to providing a pleasant and enjoyable journey to all passengers.

Hong Kong Airlines Ltd, IATA: HX is an airline based in Hong Kong, with its headquarters in the Tung Chung district and its main hub at Hong Kong International Airport.

It was established in 2006 as a member of the HNA Group.

Hong Kong Airlines’ growing network currently covers over 30 cities regionally, including the Gold Coast, Auckland, Beijing, Shanghai, Bangkok, Bali, Taipei, Seoul, Tokyo, Sapporo and Okinawa.

And the newly launched Vancouver and Los Angeles routes in 2017. The airline has a combined fleet of 35 aircraft. The current passenger fleet has 31 aircraft with an average age of about 5 years as of September 2017.

Hong Kong Airlines codeshares with the following airlines:

- Asiana Airlines

- Air Astana

- Air India

- Air Mauritius

- Bangkok Airways

- China Eastern Airlines

- Etihad Airways

- EVA Air

- Fiji Airways

- Garuda Indonesia

- Grand China Air

- Hainan Airlines

- Jet Airways

- Kenya Airways

- Royal Brunei Airlines

- Shanghai Airlines

- Virgin Australia


Tourism Observer

JAPAN: Skymark Emerges From Bankruptcy

On March 28th, Skymark Airlines [BC/SKY] announced that it had completed its corporation revitalization process and received approval to emerge from bankruptcy. At the same time, it also revealed its mid-term plan for FY2016-2018, which includes opening up international routes and targeting 80 billion JPY in total revenues to produce an operating profit of 7 billion JPY by FY2018. Japan's third largest carrier filed for bankruptcy protection on January 29th, 2015 with the Tokyo District Court.

Boeing 737-8HX(WL) JA73NP arrives at Sapporo New Chitose. What future for Skymark? The domestic market is shrinking, while regional international routes are now well-served by LCCs. One solution could be the combination of using midnight international routes at Haneda (which would increase utilization), coming up with a loyalty program, and upgrading their reservations system to enable code-shares with international carriers (which would allow them to leverage their domestic network), though the third would most likely be vetoed by ANA.

Once post-deregulation's most successful start-up to challenge the ANA/JAL duopoly, Skymark was re-launched on September 29th under new ownership (Skymark relaunched with ANA sponsorship.). Integral Corporation holds the majority 50.1%, ANA Holdings has a grip on 16.5%, and UDS Airlines Investment has 33.4%. UDS is a new investment firm jointly owned by Development Bank of Japan (DBJ) and Sumitomo Mitsui Banking, both loyal partners of ANA. ANA Holdings is the parent of Japan's now largest carrier All Nippon Airways [NH/ANA].

Skymark's creditors initially demanded 308.9 billion JPY in total liabilities (Skymark's total debts skyrocket to 300 billion JPY.), however, that was reduced to 154.3 billion JPY after negotiations. Under court protection, the final repayment figure was settled at 16.1 billion JPY. Major creditors included Intrepid Aviation, Airbus, Rolls-Royce, and CIT Aerospace. The U.S.-based aircraft lessor initially sought for 900 million USD for scrapping Airbus 330 leases (Skymark terminates all Airbus A330 leases.) and fought against ANA to sponsor Skymark with Delta Air Lines [DL/DAL] (Intrepid picks Delta to sponsor Skymark.). The European planemaker at first called for 700 million USD for the A380 cancellation (Skymark hopes to settle Airbus A380 penalty in October.), but drastically reduced the amount after ANA agreed to take those A380s (Bye-bye Skymark, Hello ANA Airbus A380?).

Skymark's financial performance is quickly improving, partly helped by lower fuel costs. FY2015 is expected to finish with revenues amounting to 70 billion JPY, producing an operating profit of 1.5 billion JPY. It reverses the airline's results for FY2014, which saw revenues totaling 80.9 billion JPY but translating to a 17.6 billion JPY operating loss. It now targets FY2018 with total revenues at 80 billion JPY with an operating profit of 7 billion JPY, calculating with crude oil at 50 USD per barrel. "We have 26 737s in our fleet, but only use 20 of them at once. Bringing utilization up to 24 aircraft will help increase revenue," said President Masahiko Ichie, adding "Our CASK (cost per available seat kilometer) is 8.5-8.6 JPY, and we're aiming for 8 JPY." During the time frame, a new future aircraft type will also be evaluated.

The revitalized airline also announced plans to go international by FY2018 starting with charter flights. "We need to use FY2016 to further strengthen our balance sheet. We'll carry out feasibility studies in FY2017, and hope to operate the first charters in FY2018," said Mr. Ichie, adding "East Asia and Southeast Asia, as well as Guam and Saipan are likely candidates." Skymark's President also said they are evaluating re-entering markets it withdrew from during its bankruptcy, mentioning Ishigaki [ISG/ROIG], Kumamoto [KMJ/RJFT], Miyako [MMY/ROMY] (Skymark to cut 15% of flights, ground all Airbus A330s.), Sendai [SDJ/RJSS] (Skymark to pull out of Sendai in October.), and Yonago [YGJ/RJOH] (Skymark decides to close Yonago, keep Ibaraki.). "We don't want to axe a new route after only one year," said Mr. Ichie, explaining new destinations would be carefully considered.

Meanwhile, Chairman Nobuo Sayama reiterated that code-sharing with ANA has been indefinitely postponed, as Skymark continues to refuse to adopt ANA's Able-D reservation system. Mr. Sayama believes retaining its own reservations system is key to keeping Skymark independent, and taking up Able-D would essentially relegate Skymark to a de facto puppet of ANA, joining the likes of AIRDO [HD/ADO] (d.b.a. Air Do), Solaseed Air [6J/SNJ], and Star Flyer [7G/SFJ]. "Our performance is improving, so there is no urgent need for code-sharing," said Mr. Sayama, adding "Our arms are open. We have proposed to code-share by placing an interface between ANA's and ours. We don't necessarily need to adopt their system. It's up to ANA."

Mr. Sayama, who also serves as the President of Skymark's largest shareholder Integral, is seemingly determined to limit ANA influence to only maintenance and operational issues, and not with business decisions. The conflict will continue between Integral and ANA as the former's interest lies in keeping Skymark operationally independent until its planned re-listing in 2020 or before, while the latter wants to keep Skymark under its influence for as long as possible to shut out true competition at bread-and-butter Tokyo/Haneda [HND/RJTT]. However, even if code-share talks do not bear fruit, for ANA its investment may have already been worth it, as otherwise a Delta-backed Skymark would have posed a much stronger threat to ANA.