Travel - GBA

Airlines Updates

Dragonair: Still Flying High

When Cathay Pacific took over its early arch-rival in 2006, everybody thought the days of the flying dragon were numbered. Eight years later, the dragon is still soaring and it doesn’t look like it’s running out of breath…

With freshly-garnered international accolades from 2013 under its belt, it seems all is smooth going for Dragonair these days. Just last October, the airline was named “Best Regional Airline” for the fourth consecutive year at the TTG Travel Awards. However, the winds haven’t always been blowing in favour of the carrier, especially during its early days as Cathay Pacific’s first local competitor.

In July 1985, Hong Kong Dragon Airlines’ first commercial flight took off for Kota Kinabalu from the old Kai Tak Airport in Kowloon Bay. The airline was established just two months before that as a subsidiary of the Hong Kong Macau International Investment Co. The rivalry between Cathay Pacific – Hong Kong’s flag carrier controlled by Swire Group, one of the city’s oldest and largest groups – and Hong Kong Dragon Airlines was blistering as they struggled over flight-slot applications. The wrangle peaked when the Hong Kong government imposed a one route-one airline policy in 1987, which lasted until 2001.

Dragonair’s planes were grounded for a while as the new airline battled out its case at route licence hearings with Hong Kong's Air Transport Licensing Authority (ATLA). Little did they know that being pushed out of the more desirable routes of the then-booming western markets was a blessing in disguise. Forced to take what was left, the young airline instead focused on the budding mainland China market.

Fast forward to 1990: Cathay Pacific and its parent company Swire Pacific bought a 43 per cent stake in Dragonair. The take-over was completed in 2006 when Dragonair became a wholly owned subsidiary of Cathay Pacific Airways, marking the beginning of a strong partnership that optimised on their complementary strengths.

When Cathay Pacific acquired Dragonair for HK$8.22 billion eight years ago, it said that Dragonair would only have six years left under its own brand. However, that deadline passed two years ago and the status quo doesn’t look likely to change – why should it, when Dragonair’s brand has proven to be so successful? This is especially true in the mainland, where Dragonair is better recognised and positioned than its holding company Cathay Pacific. With a better reputation for quality, service, and safety compared to domestic airlines in China, Dragonair has emerged as the carrier of choice for those travelling within mainland China and the region. The airline also takes advantage of its base in Hong Kong as a regional transport hub and an international business centre, with more than 59 million passengers travelling through the city a year.

Looking to the future, Dragonair is moving the brand and company forward with new products, upgrades, and destinations in the offing.

“Dragonair continues to keep a close eye on China and the Southeast Asian region,” says Dragonair Chief Executive Officer Patrick Yeung. “It’s been two years of high potential and dynamic traffic flow,” he says, referring to the more recent additions and relaunches of flights to Yangon, Da Nang, Zhengzhou, and Wenzhou.

Despite the slowing of the China market, the flourishing of which enabled Dragonair to take off during its first two decades of operation (the timing couldn’t have been more perfect), Dragonair is still ploughing ahead thanks to its strong regional operations, which include the emerging markets of Southeast Asia.