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Hong Kong Airlines eyes expansion into European, U.S. routes

Hong Kong Airlines plans to fly European and U.S. routes by 2018.

HONG KONG -- Hong Kong Airlines has served mainly short- to medium-haul routes to Asian destinations, but the midsize carrier of the territory is preparing for a fresh expansion into European and U.S. routes by 2018, as Asia's growing middle class continues to boost air travel demand.

Chief Operating Officer Ben Wong Ching-ho said the Hong Kong-based airline has ordered 15 A350 passenger aircraft, the latest large model of European plane maker Airbus. Delivery of the jets, whose cost totals over $4 billion at catalog price, will begin in 2018.

The company, part of HNA Group, which includes China's fourth-ranking Hainan Airlines, is a full-service carrier serving more than 30 destinations, chiefly in mainland China, Japan and Southeast Asia. Passengers increased about 10% to 5.6 million in 2015 from a year earlier, and the company expects the figure will further increase to 6.6 million this year.

It currently operates 32 aircraft, including A330s and A320s, both small to midsize Airbuses. "We continue to expand our aircraft portfolio and we will have more than 50 aircraft by the end of 2018," said Wong. He added that a selling point for the company is that the average age of aircraft in its fleet is less than four years, less than its rivals.

Fiercer competition

The expansion plan comes as Hong Kong Airlines faces tougher competition against rivals such as Cathay Pacific Airways and discount carriers, as passenger traffic continues to grow at Hong Kong International Airport, one of the key hubs for international flights.

Ben Wong Ching-ho

The plan to enter European and U.S. routes forms the centerpiece of the airline's growth strategy. Ahead of the 2018 delivery of the large aircraft, the company will also lease a few A350s as early as 2017 as a preparatory step to start the new routes, according to Wong.

But the company's expansion drive is also targeting Asia, where it considers Japan a key destination, as it expects demand to grow, Wong said. This year, flights to Okayama, Narita and Kansai airports have started, and a Yonago route is scheduled to launch in September, bringing the total Japanese routes to eight.

The expansion will require more workers, and the company is in the process of significantly boosting the number of cabin attendants, ground staff and maintenance engineers. Wong said the carrier has already met half its goal of hiring 1,000 new employees.

To ensure consistent worker quality, a large, 1.8 billion Hong Kong dollar ($232 million) training center is under construction on a 6,000-sq.-meter site near Hong Kong International. The facility, to be equipped with a full-size cabin mock-up and flight simulators, will come into use by the end of 2018.

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