Wednesday, December 2, 2015   

Flight to success

Imogene Wong

Monday, November 11, 2013

Andrew Cowen flies almost every weekend to visit his Japanese wife in Tokyo - one of eight Asian destinations of Hong Kong Express.

The new budget airline, which launched inaugural flights to five destinations on October 27, is the seventh carrier the 46-year-old South African has worked for in the past two decades.

Cowen started with British Airways, before changing his focus and specializing in start-ups and low-cost carriers in the Middle East and Asia.

He said ticket prices at Hong Kong Express will be up to 70 percent cheaper than those charged by conventional airlines.

For example, on the Tokyo-Haneda route, his budget round-trip fare may be as low as HK$1,480, excluding taxes, compared to about HK$5,000 with full- service carriers.

Hong Kong Express launched ticket sales in September, recording its 100,000th booking about a month later.

The long-awaited budget airline attracted so many customers that its booking website was overloaded following its launch on September 12.

Worse, a software bug was found, which led to a lot of complaints. Also, some itinerary information for passengers was wrongly stored, and the firm had to put on an extra team to fix it, Cowen said .

"Now 98 to 99 percent of the system works," he said.

Not surprisingly, Tokyo and Osaka are the most popular destinations among the eight routes currently served. The others are Phuket and Chiang Mai in Thailand, Taichung in Taiwan, Kunming in China, Kota Kinabalu (Sabah) and Penang i
n Malaysia.

Some flights to Osaka and Tokyo are booked solid, even though the flight schedule may hardly be called a good one, Cowen conceded. For example, the arrival time in Tokyo is 1.30am. "Although there are some flights that take off late at night, it works very well for some people, as they do not need to take a day's leave from work," he said.

Sabah is also very popular, Cowen noted, while ticket sales for Phuket haven't been that good due to the awkward arrival time of 4.15am.

However, when passengers choose to save money by flying with budget carriers, they have to be prepared to tolerate some inconvenience, he said.

But given the overwhelming response so far, Hong Kong Express is already planning to expand.

Six more planes will be added to the current fleet of five Airbus A320 aircraft, and the number of cabin crew is expected to triple within two years.

The company's ambitious plan is to start breaking even in two years.

Without disclosing the new destinations, Cowen said routes will rise to about 22 or 25 by next year and the carrier may serve up to 100 destinations within three to four hours flying time of Hong Kong in the future.

Being a low-cost airline with prices that are on average 30 percent cheaper than full-service carriers, Hong Kong Express has to devise ways to minimize costs.

Passengers have to pay extra to check in luggage, as well as for food and drink.

The airline charges HK$80 for the online checkin of luggage weighing less than 15 kilograms and HK$100 for up to 20 kg. If passengers check in luggage at the airport, it will cost them HK$250.

Meals are priced at about HK$40 to HK$60, with choices including sweet and sour pork and a dim sum set.

Cowen also said the firm is looking at providing wi-fi service on board.

Many who still remember the ill- fated budget carrier Oasis Hong Kong Airlines, which went bankrupt in 2008 after only three years in operation, fear budget carriers are doomed to fail in the SAR.

"That's rubbish, to be honest, our bookings have already proved it will work," Cowen said.

He stressed that Oasis' failure resulted from the wrong business model, which was to operate long- haul flights - Hong Kong-London, and Hong Kong-Vancouver) - using jumbo jets.

Cowen said regional flights offer a lot of room for price cuts, as tickets for certain destinations served from Hong Kong currently cost twice as much as flying out of Singapore.

Furthermore, there are a total of 12 budget carriers offering flights to 22 destinations departing from Hong Kong, compared to more than 60 destinations flown from Singapore.

So, there is still a lot of room to meet demand in the potential market.

The whole transformation of Hong Kong Express from a full-service airline to a low-cost carrier took Cowen just half a year.

His job basically is to differentiate it from its sister company - Hong Kong Airlines - and turn it into an independent carrier.

Both Hong Kong Express and Hong Kong Airlines share the same parent, Haikou-based Hainan Airlines - but their management teams are now separate.

The sister airlines were both previously full-service carriers, with Hong Kong Express focused on short and medium-haul routes, while Hong Kong Airlines operated medium to long-haul ones.

So, Cowen said, the transformation was relatively simple, since Hong Kong Express was already a functioning airline. All that was needed was to change the method of operation.

The sister carriers still work closely and avoid flying the same routes. Some routes previously operated by Hong Kong Airlines have now been shifted to the budget carrier. "Hong Kong Airlines has a very extensive mainland China network, flying from Hong Kong," Cowen said.

"But what Hong Kong Express does is to fly from Hong Kong to other regions."

At present, Hong Kong Airlines is trying to tap more long-haul international routes, such as Istanbul and London.

Cowen views Cathay Pacific and its subsidiary, Dragonair, as his strongest competitors, because they service all of Hong Kong Express' destinations - with more preferential arrival times.

However, "third-party statistics show that Hong Kong Express has the most consistent on-time performance among all Hong Kong carriers, including Cathay, Dragonair, and Hong Kong Airlines," he said, beaming.

Cowen's next step is to make Hong Kong Express a successful Hong Kong brand, which poses the biggest challenge.

He said the carrier is highly likely to keep its current name - unlike many other budget airlines that have adopted cutesy titles such as Peach, Scoot, Vanilla among others.

Before arriving in Hong Kong, Cowen's 23-year career in the aviation industry mainly comprised management roles with budget airlines in places such as the Middle East, Vietnam, the Philippines and Japan.

He typically worked closely with airline shareholders and senior management for extended periods of time, usually in top-level positions.

Cowen said some airlines took 10 years to transform into a budget carrier, while others took just one year, such as Peach in Japan.

He expects to stay in Hong Kong for many years to come.

"I like the part of setting it all up and transforming it, and after a few years when it is ready and can fly by itself, I will go on to the next carrier," he said.

Cowen compared the whole process to the safety instructions given to passengers by the cabin crew - you have to do everything step-by-step, and be careful not to miss any tiny detail.

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