Cathay Pacific has completed its takeover of HK Express, the company announced on Friday. The airline launched its takeover bid in March and assumed full control of Hong Kong’s only low-cost airline after paying HK$4.93 billion (£505 million).
Ronald Lam Siu-por, Cathay’s current director of commercial and cargo, will head the budget carrier as CEO, the airline told staff in a memo.
Cathay CEO Rupert Hogg reiterated to staff that HK Express would continue as a stand-alone airline with a separate and unique business model, in a commitment to build on its five years of offering low-cost fares. In a statement, he added: “Having HK Express as a member, we are well-positioned to facilitate robust growth for the Cathay Pacific Group.”
“There is clearly an exciting future ahead. And we look forward to unlocking this through a continued focus on what HK Express already does so well, while taking advantage of the new opportunities open to the Cathay Pacific Group.”
Lam, who led the acquisition process on HK Express, had no prior experience in the low-cost airline business, but Hogg was keen to put on the record that over two decades, Lam had amassed “a wealth of experience within the airline industry”.
The appointment of Lam as CEO at HK Express resulted in a minor shake-up of Cathay’s management team with the first woman director appointed since July 2018.
Lavinia Lau will replace Lam as director of commercial. Lau was previously Cathay Pacific’s general manager of planning, which involved formulating and executing the fleet, network and scheduling strategy for both Cathay Pacific and Cathay Dragon for the past four years.
The acquisition comes at a time when the city’s biggest airline is facing renewed pressure on long-haul routes from competitors. In 2018, Cathay Pacific Group generated a profit of HK$2.03 billion (£208 million), ending two years of back-to-back losses.
HK Express, which was initially established as Hong Kong Express in 2004, converted to a low-cost carrier five years ago, operating a fleet of five Airbus aircraft. The airline now flies 24 aircraft to 27 cities – carrying 4.1 million customers across Asia with a heavy focus on flights to Japan and South Korea.