Dragon's fate sealed before pandemic

Editorial | Mary Ma 22 Oct 2020

It is absolutely devastating for thousands of Cathay Pacific cabin crews and ground staff to lose their jobs overnight, victims of an economic onslaught wrought by the pandemic.

And the end of days for Cathay Dragon, better known as Dragonair long before the Cathay takeover, is nothing short of tragic. However, Dragon's fate was probably sealed before the pandemic, and it can only be ironic that Covid-19 may actually have lengthened its operating lifespan.

Why? Because we are seeing a global trend in which full-service airlines are bidding for synergy with budget competitors.

Singapore Airlines was among the first in the world to pursue such a strategy, forging partnerships with low-cost airlines to cover different market segments. Growth in budget travel outperformed that for legacy airlines prepandemic.

In this regard, Cathay is a rather latecomer.

It has remained in an uneasy position since it acquired locally-founded Dragonair in 2006. When Dragonair was formed by Hong Kong tycoons Chao Kuang-piu, Pao Yue-kong and Henry Fok Ying-tung, the intentions for it were flying high, it being seen as a full-service airline created to rival Cathay.

In theory, Cathay could have transformed Dragon to compete with Singapore Airlines' Scoot or Hong Kong Express as soon as it became clear budget travel was the growing trend.

Cathay had first tried to rebrand Dragon, naming it rather awkwardly Cathay Dragon in the process. There was a sense then that Dragon's destiny was being redefined. But then Cathay's management later opted for a more direct pathway.

Its fall was sealed when Cathay announced last July that it had acquired Hong Kong Express.

It was more likely than not that had it not been for the coronavirus pandemic, Cathay would have announced the restructuring sooner to bury the Dragon brand. In this regard, that cockpit crews are being retained while thousands are being sacked is noteworthy.

The company needs the pilots to fly its full-service as well as budget fleets.

So, when the media raised the question of whether Dragon can take to the skies after the pandemic is over, the answer should be more than obvious.

It's like asking a couple in the midst of a divorce if there is a chance they may get together in future? Perhaps, they may, but the thing about divorces and endings like Dragon is that there is a finality for them that can be enduring.

Dragon's demise has less to do with it being some corporate plan hatched up to make staff redundant, much less with the pandemic: it is a step necessitated by an inevitable need to try and catch up with an overarching global aviation trend.

Looking forward, Cathay has to do everything possible to inherit the lucrative routes - especially the Hong Kong-Shanghai crown jewel - from Dragon. To this extent, SAR chief executive Carrie Lam Cheng Yuet-ngor offered some light the other day with her appeal to Beijing to forcefully support Hong Kong's aviation industry.

Has Beijing given its nod to do so, even if that assent may not extend to all Dragon's routes? It's probable.

There is a rumor going around that a startup, Greater Bay Airlines - being established by controversial businessman Bill Wong Cho-bau with the help of some former Cathay executives - is poised to take over all the routes left by the Dragon.

For now, that story sounds too good to be true.


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May 2021

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