Sunday, October 8, 2017

HK Express' 18 cancellations prompt abrupt CEO change. Hong Kong hub under stress

Low cost airline flight cancellations are in the news, upsetting consumers and the causing regulators concern. Yet comparing the recent experience and outcome of Hong Kong's HNA-affiliated budget airline HK Express with the well publicised account of Ryanair offers a significant contrast. Ryanair cancelled 40-50 daily flights (2,100 in total) and briefly left some consumers without options, while HK Express cancelled only 18 flights in one week and largely protected passengers. Nonetheless this forced the abrupt exit of its CEO and other management.
Aviation may be tuned to the current and future growth in the east, where HK Express' home market of Hong Kong bills itself as "Asia's World City". Yet the unfortunate incident does not reflect well on the Hong Kong aviation hub and no party emerges looking good. This is one of the more comparatively reasonable markets in the region. Europe, for its faults and lacking infrastructure, appears to have demonstrated regulatory checks, fairness and rationality as well as its underpinning of (mostly) liberalisation. Even greater regulatory matters, and uncertainty, await Asian aviation. Forthcoming uncertainty at HNA could give a boost to Cathay Pacific as it restructures.

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