Air Hong Kong link-up awaits franchise nod
Cathay Pacific Airways and DHL Worldwide Express are moving quickly to transform Air Hong Kong into a co-operative venture as they await the go-ahead from the Airport Authority on franchise rights for a new express cargo terminal.
The two companies, which signed a memorandum of understanding in January to jointly operate a mid-range freighter fleet for the intra-Asian trade routes, have already begun securing aircraft, according to sources.
A formal unveiling of the venture was not expected until early autumn, possibly in October.
The venture now hinges on the successful awarding of the new express terminal franchise to DHL, which will then use Chek Lap Kok as its main regional hub.
Four months of negotiations between the authority and DHL have progressed to where a signing ceremony for the franchise is expected to be held sometime later this month.
According to company sources, the venture has settled on the Airbus Industrie A300F freighter as the aircraft of choice for the new fleet, given its better economics on regional routes over the slightly larger Boeing 767 freighter.
They indicated Cathay had already found four second-hand A300F aircraft to buy.
Cathay is understood to be planning on buying the aircraft then leasing them to Air Hong Kong, which Cathay made a wholly owned subsidiary in February at a cost of nearly HK$200 million.
Air Hong Kong is expected to ultimately operate a fleet of eight A300Fs on regional routes from Japan to the east of Hong Kong, and Malaysia to the west, while being based at the new express terminal at Chek Lap Kok.
The network will be augmented by interlining agreements with China Southern Airlines and China Eastern to capture freight traffic from within China, primarily from the burgeoning financial and electronics industries in the Yangtze River basin near Shanghai.
The Air Hong Kong fleet is expected to be running at full capacity by the middle to late next year.
Sources said the venture would mark a departure from Cathay’s usual aircrew hiring practices.
It is understood interviews for pilots began in Malaysia and the Philippines last month, with the crews to be based primarily outside of Hong Kong.
“Because of the relatively simple hub and spoke nature of the new network within the region, the plan is to base the pilots at the ends of the spokes,” another source said.
Cities such as Kuala Lumpur and Manila offer significantly cheaper pools of labour for pilots, giving the venture much lower operating costs than was previously possible for Cathay’s cargo operations. The Air Hong Kong crews are expected to be direct-entry hires, rather than under the seniority-based system which Cathay Pacific uses for pilots of its main passenger fleet operation.
However, a Cathay official would not confirm either the aircraft sourcing plans or that it had already begun to interview potential pilots.
“We are recruiting freighter pilots as usual for our long-haul cargo operations. But for Air Hong Kong, there is no recruitment going on at the moment,” she said.
DHL does not operate its own aircraft in Asia, relying on belly-space in passenger jets of partner airlines, including Cathay.
Its previous three-year agreement with Cathay is set to expire early next year, leading the two to discuss the deeper co-operation.
Last month, Air Hong Kong leased its first A300 freighter – an older B4-203F converted passenger aircraft – for a new route to Osaka.
