Cathay Pacific (CX, Hong Kong International) has no immediate plans to develop a Low Cost Carrier (LCC) despite increasing pressure on its yields airline Director (Corporate Development & IT), Paul Loo, has said.
Responding to concerns from airline employees about growing competition from mainland Chinese carriers which, by virtue of their lower cost bases, are now gaining a greater share of the Hong Kong international market, Loo said that although detailed studies have been conducted, capacity constraints at Hong Kong International were not conducive to the setting up of a budget carrier.
"Ever since LCCs first appeared we have considered whether this might be an appropriate model for Cathay Pacific, conducting detailed studies and analysis to see if we could find a workable solution," he said.
"Our answer, at least in the short term, is that we will not start up our own LCC and that we will continue to operate two full-service premium carriers that offer good fare deals to our customers."
Loo added that once the construction of Hong Kong's urgently required third runway had been completed, then Cathay Pacific may re-consider its position.
"Once the three-runway system is in operation at HKIA, we might be in a position to reconsider setting up an LCC with a separate brand, cost structure, fleet and staff – but that point is almost a decade away."
At present, the only LCC hubbed at Hong Kong Chek Lap Kok is HK Express (UO, Hong Kong International). Last year, Cathay Pacific and its Cathay Dragon (Hong Kong International) unit successfully thwarted the launch of Jetstar Hong Kong (Hong Kong International) claiming, among other arguments, that Hong Kong's existing infrastructure was insufficient to handle yet another LCC's operations.
