Cathay Pacific closes Dragon brand, shifts flying to budget unit HK Express
Cathay Pacific Airways, the flag carrier of Hong Kong, has been among the world’s hardest-hit airlines during the coronavirus pandemic.
Forecasting a four-year recovery from COVID-19, the Oneworld Alliance carrier unveiled plans on Wednesday to shut its iconic Cathay Dragon brand and shift much of that flying to budget arm HK Express. The move, coupled with the layoff of some 24% of Cathay Pacific’s staff — or 8,500 people — is meant to streamline and resize the carrier as it tries to weather the crisis.
The shift is the latest air travel change to greet flyers as they return to the skies. It is unclear yet how much the loss of Cathay Dragon will effect schedules, especially between Hong Kong (HKG) and mainland China. But what is clear is travelers will no longer enjoy Dragon’s full-service model and instead receive HK Express’ a la carte model where nearly every amenity comes at an extra fee.
“We have taken every possible action to avoid job losses up to this point … Unfortunately, we will not survive without further measures,” Cathay Pacific CEO Augustus Tang Kin told staff in an internal memo according to the South China Morning Post.
Cathay Pacific joins the growing list of airlines facing drastic restructurings because of COVID. Virgin Australia recently emerged as a dramatically slimmed down airline with a new owner after going through Australia’s voluntary administration process. And Latin American carriers Aeromexico, Avianca and LATAM Airlines are restructuring in U.S. bankruptcy court.
“[The] outlook has actually gotten darker — something I would not have believed possible just a few months ago,” International Air Transport Association (IATA) director general Alexandre de Juniac said at the end of September. The organization has called on governments to continue to support airlines through the winter or face additional collapses.
The closure of Cathay Dragon does not directly effect U.S. travelers. The airline connected Hong Kong to destinations primarily in China and East Asia, though its map reached as far west as India and east to Japan prior to the crisis.
The airline began flying as Dragonair with Boeing 737s in 1985. It became an affiliate of Cathay Pacific in the early 1990s, growing to complement its parent’s long-haul flying with shorter hops into China. The airline was rebranded as Cathay Dragon in 2016.
Cathay Pacific hopes a COVID vaccine will be released and available widely enough for air travel to begin recovering in earnest by the second half of 2021 — or beginning in July — according to its latest investor update. Until then, however, the airline only anticipates flying about a quarter of what it flew in 2019 during the first six months of 2021.
Prior to COVID, Cathay Pacific served eight destinations in the U.S. However, today it only offers limited flights to just three cities: Los Angeles, New York and San Francisco (SFO), according to Cirium schedules.
But even with drastic cuts unveiled this week, the carrier will not say it is out of the COVID woods yet.
Cathay Pacific “will adopt measures to ensure that it will survive the COVID-19 crisis and emerge as a more focused, efficient and competitive airline” if needed, it said in the investor notice.
Featured image by Artur Widak/NurPhoto.
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,650
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.