Cathay would rank as the 15th largest airline (by flight volume) in the Asia Pacific market after acquiring HK Express. Cathay follows the trends of established Asian airlines bolting on their own low-fare units, such as All Nippon Airways + Vanilla Air and Peach, Singapore Airlines + Tigerair and Scoot, and Qantas + Jetstar.
HK Express reported an HK$141 million net loss last year and had a net asset value of HK$1.12 billion, regarding the announcement.
A lack of slots at Hong Kong International Airport had constrained Cathay’s ability to follow peers like Singapore Airlines and Qantas Airways and set up its own budget brand.
Cathay chief executive Rupert Hogg told Reuters last week he believed low-cost airlines could meet a “unique market segment” not capture by the Hong Kong carrier in the meantime and helped to stimulate a new generation of travel demand.
Cathay is in the 3rd year of a three-year turnaround plan designed to cut costs and boost revenue to make it more competitive against Chinese, Middle Eastern rivals and low-cost carriers.