Four months after morphing into a low-cost carrier, Hong Kong Express plans to slash operating costs while ramping up operations in 2014.
The airline has reduced unit costs by 30% over the past six months, deputy chief executive Andrew Cowen told Flightglobal in a recent interview.
“That’s taking us more into the territory of where the other LCCs are and puts us much more on a competitive footing,” he says.
A large part of that cost reduction has come from increasing the utilisation of its five Airbus A320 aircraft, coinciding with the launch of additional routes and frequencies in recent months.
“Previously we were about nine block hours per aircraft per day, but we’re just shy of 12 hours per day now,” he says. “With our next route launch, it takes us up to just shy of 14 hours a day.”
The airline is planning to take delivery of five more A320s this year, and extend its network from eight destinations up to possibly 20.
“Our biggest challenge for this year will be managing the scale of growth,” Cowen admits. “There’s no real alternative, it’s very difficult for an airline to have a sustainable and competitive position with just five or six aircraft, it just doesn’t work.,”
The airline is also working to squeeze more savings out of the airline’s supply chain over the next year. However, Cowen adds that the limited number of suppliers at at Hong Kong International airport makes it harder to achieve some savings, such as in catering.
“Hong Kong airport is not that expensive as an airport, it’s the suppliers at the airport,” he says.