Hong Kong's third-largest passenger airline is planning an aggressive expansion that should put it into direct competition with Cathay Pacific Airways and Dragonair.

Hong Kong Airlines was known as CR Airways until November, when it was rebranded after its name change was approved by Hong Kong's Civil Aviation Department.

The carrier was established several years ago by Hong Kong-based investors to operate Bombardier regional jets, but China's fast-growing Hainan Airlines recently bought into it and has since replaced the airline's regional jets with Boeing 737-800s.

Hong Kong Airlines has also since added services to several additional destinations in China, which will be its main focus in the short term, and its backers say there are plans to also serve cities in other Asian countries. It is also known to be eyeing the long-haul market for future expansion, including destinations in Europe such as London.

An expansion into the long-haul market as well as an expansion outside greater China to cover other parts of Asia will put it in direct competition with Hong Kong's main carrier, Cathay Pacific Airways.

With its addition of more China services, Hong Kong Airlines is already competing more aggressively with Hong Kong's second-largest airline, Dragonair, which recently became a wholly owned subsidiary of Cathay.

"Hong Kong Airlines will be developing new aviation markets and networks, focusing mainly on routes between Hong Kong and the mainland [China], Taiwan as well as other major Asian cities," the carrier said in announcing its rebranding.

"Moreover, we will be seeking co-operation with local and international partners, enhancing Hong Kong's position as an international hub and logistic centre. We will also operate direct flights to secondary and tertiary cities in the region, which will help develop tourist and economic opportunities between these new destinations and Hong Kong."

Hong Kong Airlines now operates three 737-800s and the airline says many more are to be added in 2007.

Source: Airline Business