Cathay Does a U-Turn on Budget Carrier With HK Express Talks

(Bloomberg) -- Cathay Pacific Airways Ltd. is having a change of heart about the budget-airline business.

At an earnings briefing in Hong Kong Wednesday, a reporter asked Chairman John Slosar why the premium airline was looking to the low-cost carrier business now after spurning that model earlier. Cathay said last week that it was in “active discussions” on an acquisition involving Hong Kong Express Airways Ltd., the city’s only budget airline.

“We never said never on that. In aviation you can never say never,” Slosar said. “You have to be willing to change when events change, when opportunities present themselves.”

Less than two years ago, shortly after Asia’s biggest international carrier embarked on a three-year transformation program to stem losses, Chief Executive Officer Rupert Hogg had ruled out starting a budget business. “Broadly speaking, we have no plans to start a low-cost airline,” Hogg said in August 2017.

While he did note that Cathay competes with low-cost carriers on different routes and needed to have a proposition that price-sensitive travelers would find attractive, the executive said Cathay planned to focus on better services such as wi-fi on board planes and more dining options to nurse the carrier back to financial health.

To contact the reporters on this story: Natalie Lung in Hong Kong at flung6@bloomberg.net;Kyunghee Park in Singapore at kpark3@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Lena Lee, Sam Nagarajan

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