HONG KONG: Hong Kong-based carrier Greater Bay Airlines (GBA) is set to launch its first scheduled commercial flight to Bangkok next month, with the company delaying fleet expansion amid continued border control measures between the city and mainland China.
"We need to start operations next month. We can't wait too long. We have to get aircraft up in the sky. It may not be making profits, but we need to show people we are committed," chief executive Algernon Yau Ying-wah said in an interview with the South China Morning Post at his office on Lantau Island on Tuesday.
The airline is planning to roll out two chartered flights to Bangkok on July 9 and 16, with its first scheduled service to the Thai capital on July 23. The chartered flights will operate through travel agents, who will book tickets and sell them to leisure travellers at a package price of about HK$20,000 (90,000 baht) per person covering the air ticket, hotel booking and seven days of quarantine upon return.
The launch of its flights will be in the same month as July 1 celebrations in Hong Kong marking the 25th anniversary of the city's return to Chinese rule. An attempt last year to take off on National Day on Oct 1 failed after licensing delays.
Starting a new airline in the middle of a pandemic has been fraught with challenges, with the carrier scaling back on staff hires and fleet expansion, but Yau said being small and agile meant his company had been able to be flexible in these uncertain times.
While international travel is recovering around the world, with some European and North American carriers struggling to keep pace with pent-up demand, mainland China and Hong Kong have stuck to a "dynamic-zero Covid" policy.
"China's Covid policy gives us some consideration about when they're going to reopen. Then we have to shift our plan to start with the regional route first and then the second phase into the mainland," Yau said.
The fledgling airline also ran into delays obtaining its air operating certificate (AOC) last October, dashing plans for a launch last year on the symbolic date of Oct 1, the 72nd anniversary of the founding of the People's Republic of China.
In February, the Air Transport Licensing Authority awarded the carrier a five-year permit to operate scheduled commercial flights on 104 routes, including 48 to mainland China, as well as to Taiwan, Japan, South Korea and other destinations in the Asia-Pacific region.
In May, GBA was awarded designated status from the Hong Kong government, allowing the company to open negotiations with foreign countries.
Yau said the airline planned to operate flights first to popular holiday destinations for Hongkongers, such as Bangkok, then Kuala Lumpur in Malaysia, Japan and South Korea, before looking at mainland China.
He added the carrier was waiting for additional approval from mainland authorities to operate there.
The airline has the financial backing of tycoon Bill Wong Cho-bau, the man behind Shenzhen-based Donghai Airlines, who has pledged to invest HK$2 billion in GBA.
Yau admitted the situation was challenging and the company was "burning cash", but with Wong's backing, it remained healthy.
Amid China's continued border control measures, GBA has halted expansion plans with an original target of seven jets this year being pushed back. Yau said it would stick to leasing three Boeing 737 this year, and only consider adding another plane or two if the situation improved.
He said the airline was in discussions with aircraft manufacturers to determine an ideal type for its operation, and how many to introduce beyond 2023 and the following five years, depending on "the market recovery situation and on aircraft available from the manufacturer".
"It will take about 18 months to introduce a new aircraft into the fleet, but if the opportunities are there then we will lease more aircraft first," Yau said.
GBA is hoping to exploit an opening left by the closure of regional carrier Cathay Dragon, but Yau does not see the airline competing with Cathay Pacific Airways.
"We are building the pie rather than slicing the pie from them. We can build a bigger pie," he argued.
Yau has set out an ambitious vision, which includes building a new network and fresh routes connecting the city and the mainland to belt and road destinations such as Nur-Sultan in Kazakhstan and Pakistan, while also increasing Hong Kong's connectivity to Africa.
"We are very well connected with the Western world. But we are not well connected with those places. So if we can target them and come up with a right strategy, I think there are many opportunities."
Hong Kong's flagship carrier Cathay Pacific has recently said it is starting to rehire pilots and cabin crew, and Yau admitted competition was stiff.
"They are recruiting many, many and now the market is short of people," he said, adding there was a shortfall of first officers, but captains were still available.
The airline originally planned to employ 200 people by the end of the year, but Yau said that now depended on how quickly the business recovered. There are currently some 150 employees.
The airline has hired 30 pilots comprising Hongkongers and some foreigners with permanent residency in the city - mostly from Cathay Dragon. Around 90% of cabin crew are also from Cathay Dragon, according to Yau.
Like other airlines and businesses in Hong Kong, Yau's hope is for the next administration to relax quarantine rules for arrivals. However, he admitted it would take "energy and effort" by local authorities to negotiate and explain to the central government on easing measures and opening up the city.
He said he did not see conflict between border reopening with the mainland and welcoming back international travellers, provided Hong Kong maintained a stable coronavirus situation through testing and vaccinations.
"Dynamic zero doesn't mean zero cases. They believe there will be cases, but once a case is identified, how quickly you're able to control and mitigate and confine the spread of the virus. That's what the government needs to do," he said.
In April, Willie Walsh, director general of the International Air Transport Association, said Hong Kong had fallen "off the map" as an aviation hub and it would be difficult for the city to rebuild that reputation. Yau said if the issues could be addressed in a "timely" manner, he believed the city could recover its status.
"[Competitors] are taking part of the business, because of the closing down not because of their advantage over Hong Kong ... People will still come back. But of course, it's a challenge, it is not easy," he said.