Hong Kong Airlines Announces Closure of London Route

As first revealed by our sister Routesonline blog, Airline Route, earlier this month, Hong Kong Airlines is to close its all-Business Class service between Hong Kong and London Gatwick from next month. The airline only launched the daily Airbus A330-200 flight on March 7, 2012 but has struggled to generate enough traffic to make the route sustainable, with average loads only reaching a reported 30 per cent according to analysts.

There has been uncertainty about the route since it was first announced last year with analysts suggesting that the all-Business Class model would not work on this already competitive market. In late June 2012 after just over three months of operation it became clear that all was not well with the route as the carrier closed reservation for all discounted fare types for travel on/after September 1, 2012.

At this time the airline’s management confirmed that it was studying its network strategy but has continuously denied reports that the route could close, even when it stopped taking reservations in July 2012 for all discounted fares on all its flights, leaving only full-fare Club Premier and Club Classic tickets available.

On August 4, 2012 an update of the airline’s GDS inventory display showed all flights cancelled from September 3, 2012 with reservations closed for travel on and after this date. The Hong Kong-based carrier has now confirmed the route will be suspended but claims September 10, 2012 will be the closure date.

The airline says the continuing “weak economic outlook in Europe”, combined with the “strength of the regional business within Asia” has forced it to look at its business model and it will now instead focus its business on regional flying within the Asia- Pacific market.

“We believe that a regional model focused on Asia Pacific is most appropriate for Hong Kong Airlines at this stage of our growth,” said Yang Jian Hong, President, Hong Kong Airlines. “Our key focus will be building our regional network and strengthening our business across China, South East Asia, Japan and Korea.”

“As part of this decision, we will suspend our long-haul flights to London from 10 September, 2012 until further notice. Our plan is to redeploy the three specially equipped, all-business class A330’s which currently service the London route to charter flights following the suspension,” he added.

These aircraft are configured in a two-class arrangement: ‘Club Premier’ and ‘Club Classic’. Club Premier includes 34 luxurious suites with fully flat 6’1” beds configured 1-2-1 in the two forward cabins. Meanwhile, Club Classic features 82 cradle seats configured 2-2-2 over two cabins with a spacious 51” seat pitch with 22” width and superior dining. All cabins come complete with WIFI, AVOD, digital magazines and high definition 16:9 ratio widescreens; 15.4” in Club Premier and 10.4” in Club Classic.

There is obviously a strong demand between London and Hong Kong - An estimated 977,000 O&D passengers travelled between the two destinations in 2011. The table below highlights the main operators on the route, some of which offer services via connecting points in the Middle East and Asia. According to UK Civil Aviation Authority data, Hong Kong Airlines carried 1,965 passengers on the route in March 2012 and 1,808 in April 2012 which works out as loads of around 37 per cent and 26 per cent, respectively.

Hong Kong Airlines has attempted to offer a service with a difference with a stronger focus on yield rather than just loads. In the past airlines that have previously adopted this model and offered an all-premium service on international routes have found it difficult to penetrate the hold of the established operators and this has proved to be the same scenario for the Hong Kong carrier.