Greater Bay Airlines, backed by a Chinese entrepreneur with ties to Beijing, is attempting to take over Cathay Pacific’s Hong Kong turf.
Greater Bay Airlines, which was founded by property magnate Bill Wong, plans to fly to 104 sites in mainland China, as well as Taiwan, Japan, South Korea, Thailand, and other “destinations in the Asia Pacific area.”
Greater Bay Airlines has three Boeing 737-800 jets on lease, with aspirations to have seven in service by 2022 and more than 30 by 2026, according to its website.
CEO Algernon Yau says Greater Bay Airlines will be a “value carrier,” somewhere between a budget airline and a full-service one.
Customers would be urged to “customize” their journey before boarding by using an app to buy everything from fast food to premium whiskey to be provided in-flight.
In a statement Greater Bay said that it would “adopt the business model which offers great attractive fares, flexibility and choice for customers which empower customers to choose and enjoy for what they want and afford to pay.”
“We are excited to bring a new airline choice to customers, at a time when travellers are yearning for the opportunity to fly again soon,” says Yau, an ex-Cathay executive who for a period ran the airline’s now defunct Cathay Dragon unit.
“GBA is committed to contributing to the continual aviation development of Hong Kong and the Greater Bay Area. The airline industry helps generate trade, promote tourism, and create more employment opportunities for Hong Kong people.”
It may seem counterintuitive to launch an airline at the end of a global pandemic that has ravaged travel.
But 62-year-old Wong, dubbed the Li Ka-shing of Shenzhen for his expansive business empire across the border, isn’t a total novice.
He already owns one carrier, Shenzhen-headquartered Donghai Airlines, which services a raft of Chinese cities as well as a few regional routes.
Greater Bay Airlines’ arrival into Hong Kong also comes at a bad period for Cathay Pacific, the historic carrier owned by Swire Pacific, whose parent is John Swire & Sons, a private family corporation based in the United Kingdom.
Cathay was harmed by its affiliation with the 2019 pro-democracy protests in the former British colony even before Covid, requiring a management change.
Because Hong Kong has adopted a Covid Zero policy, Cathay Pacific can only observe as carriers in neighboring countries expand international services.
Cathay Pacific’s passenger traffic has stagnated at around 2% of pre-pandemic levels due to a lack of a home market and mainland China’s borders remaining closed, even to Hong Kong.
“We’re starting from new, so we don’t have the burden or the baggage,” CEO Yau said, suggesting that Covid has levelled the playing field.
Greater Bay Airlines, he claims, can be more agile and flexible than traditional carriers such as Cathay Pacific. Given that the Greater Bay Area encompasses Hong Kong, Macau, and municipalities in Guangdong province with a combined population of over 86 million people, it also has a ready-made traveling public on its doorstep.
“Now we’re all starting from the same line,” Yau said from an interview at his office overlooking a hazy Hong Kong Airport and its new third runway. “When business comes back, we can easily catch up and not be left behind.”
Cathay Pacific, which is nearly 30% owned by state-controlled Air China, is unconcerned about increased competition.
“There’s a wealth of potential for both business and leisure travel as the region continues to develop,” a spokesperson said
The city’s sole other commercial passenger airline is Hong Kong Airlines, which is not part of the Cathay group. Since its parent, Chinese company HNA Group, crumbled under a mountain of debt at the outset of the pandemic, it’s been limping along.
Greater Bay Airlines is now unable to earn any revenue due to a lack of ticket sales.
Wong estimated over a year ago that securing regulatory permits would cost roughly HK$2 billion (USD$257 million). Other financial facts about the airline are scarce, and Yau did not explain.
“Investing in an airline is a very costly exercise,” said Yau. “Our investor Mr Wong is a land developer in Shenzhen, so he has very strong financial support to this airline.”
If the city’s severe quarantine regulations do not change, Hong Kong’s future as an international aviation center is also in doubt.
Despite the challenges of the pandemic and Hong Kong’s Covid Zero policy, Greater Bay Airlines, according to Brendan Sobie, Singapore-based consultant at Sobie Aviation, could gain from its timing, with cheaper aircraft, less congested landing slots, and plenty of available pilots.
Wong’s ties to the mainland are also working in his favor. The businessman is a member of the Chinese People’s Political Consultative Conference, China’s most powerful political advisory body. The first route, according to Yau, should be Hong Kong-Beijing.
“Greater Bay Airlines will probably be looked at by the regulators relatively favourably,” said Richard Harris, founder and CEO of Hong Kong-based Port Shelter Investment Management. “Cathay is partly owned by British interests, partly by a Chinese airline and partly by Qatar. But what it isn’t, it’s not linked to China as much.”
Most pilots and cabin crew are Hong Kong citizens who used to work for Cathay, Dragon or Hong Kong Airlines, Yau said. “We’re quite aggressive with our plan.”
