Key facts
- HK Express CEO Jeanette Mao stated the airline is "firmly on a path to a turnaround."
- Annual yield for HK Express fell 23% year-on-year in 2024.
- Cathay Pacific's full-service airline saw yields fall 12% in 2024.
- HK Express's flight frequencies grew 46% last year and are projected to increase over 30% this year.
- Half of HK Express's 10 A320neo aircraft are grounded due to engine issues.
- HK Express is targeting Vietnam and South Korea as key tourism markets.
HK Express, the low-cost carrier owned by Cathay Pacific Airways, is on a clear path to recovery despite facing significant challenges, according to CEO Jeanette Mao. The airline is experiencing an accelerating fall in air ticket prices, a key concern amid rising competition.
Mao stated that aggressive growth in flight supply has put pressure on yields, with HK Express's annual yield, a measure of airfares, dropping 23% year-on-year in 2024. This compares to a 12% yield decrease for Cathay Pacific's full-service airline. The overall airfare decline in Asia is attributed to airlines restoring seat capacity after the pandemic, with the region's travel recovery lagging behind others due to slower returns to international flying from China and Hong Kong.
The opening of a third runway at Hong Kong International Airport has allowed airlines, including HK Express and its rivals, to increase flights. HK Express was the world's fastest-growing airline last year, with flight frequencies up 46% from 2023, and expects over 30% growth this year. However, this expansion in supply has intensified price competition on regional routes.
Asian competitors are also leveraging "fifth-freedom" rights to operate routes from Hong Kong to destinations outside their home countries, directly challenging HK Express. For instance, Thai AirAsia has launched a Bangkok-Hong Kong-Okinawa route.
Another significant hurdle for HK Express is the grounding of its Airbus A320neo aircraft due to industry-wide engine issues with Pratt & Whitney. Half of the airline's 10 A320neos remain grounded, with no clear timeline for their return. Mao indicated that the airline needs more clarity from the manufacturer to proceed with reactivating these aircraft for its recovery plans.
Despite these challenges, HK Express is pursuing strategic expansion, with Vietnam and South Korea identified as key growth markets. The airline has doubled its capacity to Vietnam in the first five months of 2025, experiencing passenger growth that outpaced capacity increases by 130%. Routes to South Korea have seen a 67% capacity increase with load factors above 90%. New routes to Nha Trang, Cheongju, Daegu, Changzhou, and Yiwu have positioned HK Express as a leading carrier on these Hong Kong routes. The airline is also targeting Southeast Asia and Mainland China for further expansion. A codeshare agreement with Cathay Pacific facilitates international and regional connections via Hong Kong.