Cathay Pacific reinforced its position as Hong Kong’s flagship carrier in 2006 by buying out local rival Dragonair from Chinese investors including the Citic Group.
However, a new competitor emerged in the same year: Hainan Airlines, part of the acquisitive HNA Group. It took over two aviation start-ups in the city. One of them – HK Express – was purchased from Macau casino mogul Stanley Ho.
HNA is now trying to challenge Cathay, which is reeling from poorly-timed bets on fuel prices and furious competition from its international rivals. Reportedly, the Hainanese conglomerate is readying HK Express for a listing too (although this may face some turbulence given the recent bad press HNA has had about its financial health; see WiC382).
Passenger sentiment towards HK Express also nosedived last week as the budget airline abruptly cancelled 18 flights to Japan and South Korea during the busy National Day holiday period. The travel plans of more than 2,000 passengers were affected, with most rebooked on other carriers (including Cathay).
HK Express says it was forced to cancel the flights after it lost several key training personnel – disrupting the training of more than 700 cabin crew and pilots. While the disruption didn’t come close to the chaos caused by Ryanair’s flight cancellations in Europe last month, HNA has just announced that Andrew Cowen, the airline’s chief executive, has been sacked.
Across the border in mainland China, travellers hitting the roads during were similarly frustrated. Overcrowding is the main issue: Xinhua reports that the main tourist destinations are expected to receive up to 589 million visitors during the week-long holiday, an increase of 12% from last year. And as a result, many roads got jammed to a standstill, with drivers stranded for hours on the highways.
Some made fun of their plight by sharing photos and videos of the congestion. Gridlocked passengers even got out of their cars to cook rice, play mahjong and indulge in impromptu group dancing.
The Pearl River Delta seems to be one of the worst-hit by traffic congestion because many of its highways were exempted from toll fees during the October ‘Golden Week’ holiday. On one key road leading to the Humen Pearl River Bridge near Guangzhou the queues stretched for 40 kilometres last weekend – with bus journeys between Shenzhen and Guangzhou taking 10 hours.
More than 10,000 Hongkongers travelling into southern China were caught up in the same chaos. Roughly 90% of the express bus services from Hong Kong to various cities in Guangdong were cancelled last Sunday (with normal service on the routes only resuming on Tuesday as the gridlock abated).
For Hongkongers this should be the last National Day holiday to be marred by traffic jams, according to Yiu Si-wing, who represents the tourism sector in Hong Kong’s Legislative Council.
That’s because the Guangzhou-Shenzhen-Hong Kong Express Rail Link is expected to start service by October 1 next year. “The new link is convenient, frequent, cheap and fast. That can reduce our current reliance on cross-border buses,” Yiu promised on a local radio show.
The high-speed train is regarded as another potential challenger to Cathay Pacific’s Hong Kong business (see WiC377) but the project could still run into political resistance, particularly over a controversial arrangement to ‘co-locate’ customs and immigration processes in its West Kowloon terminus in Hong Kong (the move is designed to save passengers’ time).
Opponents of the proposal resent that mainland Chinese officials will operate on Hong Kong soil, seeing it as an affront to protections afforded under the territory’s Basic Law.
Having worked at China Travel (one of the oldest Chinese state-owned firms to operate in Hong Kong), Yiu is one of 70 lawmakers who will vote on the co-location plan in the next few months. Hong Kong leader Carrie Lam told the media this week that opinion polls in the city showed that the majority of the public supported the plan.
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