According to the “South China Morning Post” report, sources said that Cathay Pacific has agreed to acquire Hong Kong Express Airways.
Cathay Pacific Airways (00293-HK) reportedly agreed to acquire the low-cost Hong Kong Express (HK Express). The South China Morning Post quoted sources as saying that the fastest announcement will be made today (26th), but no details of the financial terms of the agreement have been provided.
At the beginning of this month, Cathay Pacific confirmed that it was actively negotiating an acquisition involving Hong Kong Express. At the mid-month performance meeting, Cathay President John Robert Slosar was asked if he would propose a full purchase, only indicating that there was no supplement at this stage. However, he pointed out that the aviation industry is a constantly-changing industry and we should “never say never” for the development of low-cost carriers.
According to sources, Cathay Pacific will issue a formal announcement on Tuesday at the earliest. However, he did not explain the details of the agreement, including financial terms.
The deal means that Cathay Pacific will officially set foot in the low-cost market without having to adjust its high-end service strategy for its main brand.
Cathay Pacific faces competitive pressures from low-cost airlines, and the low-cost travel market will allow Cathay to attract fare-sensitive travelers.
According to sources, one of Cathay Pacific’s main tasks is to adjust the management team of HK Express, and most of the executives from HNA or HNA Group will leave.
If the deal is finalised, Cathay Pacific will control three of the four largest passenger airlines in Hong Kong.