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Aviation market in Hong Kong has long been dominated by airline giants such as Cathay Pacific Airways, however, low-cost carrier (LCC) also makes its way to the mainstream recently.
HONG KONG – Hong Kong Express Airways (HKE), a subsidiary of Hainan Airlines, announced to transform to a LCC on June 26th which will begin operating from late October this year. The company will then become the only local LCC in Hong Kong, a city where LCC is still less influential comparatively.
According to Center for Aviation, a consulting group for aviation industry based in Australia, the penetration rate of LCC in Hong Kong was only 5% till 2012 while that of Singapore was 25%. The figure, on the other hand, indicates a high potential of LCC market in Hong Kong, in terms of which, the reformed HKE planned to open several new flights to mainland China, Malaysia as well as two routes to Haneda Airport and Kansai Airport in Japan respectively. A senior manager in HKE said that the company’s target was to attract 1.5 million passengers per year as well as add 25 more aircrafts within five years.
Following HKE, Scoot Airlines, a subsidiary of Singapore Airline, plans to set up flights to Hong Kong in December. At the same time, Japanese Peach Aviation, under the name of ANA, also considers to double its flight between Kansai Airport and Hong Kong.
According to Kyodo News, Japan regards this trend as an opportunity of recovery from the “ice age” of the tourism sector between China and Japan. Statistics from National Tourism Organization of Japan (JNTO) shows that the number of Chinese tourists visiting Japan dropped by 15% i.e. 160,000 in August year-by-year, naming the 11th month decreasing in a row, while the report from National Tourism Administration of China (CNTA) indicates that the number of Japanese tourists was seen to decline by 25.5% during the same period. The main reason is said to be the worsening of relations between the two countries on a political level. However, as China has become the largest tourists exporting market for Asia countries, Japan could no longer take no actions towards this if tourism industry is regarded as important.
