Cathay Dragon

Early beginnings

The airline was established in Hong Kong on 24 May 1985, on the initiative of Chao Kuang Piu as a subsidiary of Hong Kong Macau International Investment Co. It started operations in July 1985 with a Boeing 737-200 service from Kai Tak Airport to Kota Kinabalu International Airport in Malaysia, after receiving an Air Operator's Certificate (AOC) from the Hong Kong Government. The airline began services to Phuket International Airport in Thailand, as well as six secondary cities in mainland China on a regular charter basis in 1986. In 1987, the airline became the first Hong Kong-based airline to join as an active member of the International Air Transport Association (IATA).

Dragonair was the first local competitor for Hong Kong's largest airline, Cathay Pacific, in forty years; and since the airline's inception, Cathay Pacific has fought vigorously to block the airline's flight-slot applications. In January 1987, the airline announced its expansion with the order of two long-range McDonnell Douglas MD-11 aircraft. However, after a heated hearing before Hong Kong's Air Transport Licensing Authority, the Hong Kong government adopted a one-route-one-airline policy, which lasted until 2001. The airline was not able to gain the scheduled routes it needed to compete effectively. The airline was disadvantaged in that Hong Kong's financial secretary back then, Sir John Bremridge, was a former Cathay Pacific chairman.[4][5][6]

Stephen Miller, Dragonair's first CEO, said: "Our arrival on the scene was not hailed very enthusiastically by the then Hong Kong Government...we got a lot of opposition from Cathay (Pacific).[6]" It was later discovered that Cathay Pacific was concentrating on a boom in travel elsewhere in the 1980s and had left the undeveloped mainland China market to Dragonair. Forced into accepting less-desirable routes, the young airline focused on the mainland.[6]

1990s

In January 1990, Cathay Pacific, Swire and CITIC Pacific acquired an 89 percent stake in the airline, with CITIC Pacific holding 38 percent; while the family of the airline's chairman, Kuang-Piu Chao, reduced their holding from 22 percent to 6 percent, with the remainder held by minor shareholders.[7] The change of ownership saw Cathay Pacific transferring its Beijing and Shanghai routes to Dragonair, along with a Lockheed L-1011 TriStar on a lease basis. The first Airbus A320 joined the airline's fleet in March 1993 and by December, there was a total of six A320 aircraft. This was followed by the introduction of the Airbus A330 into the Dragonair's fleet in July 1995.[4][8][9]

A further redistribution of shares took place in April 1996, when China National Aviation Corporation purchased 35.9 per cent of Dragonair and became the largest shareholder, with Cathay Pacific and Swire retaining 25.5 per cent, CITIC Pacific retaining 28.5 percent and the Chao family retaining 5.0 percent.[10] China National Aviation Corporation's holding was further increased to 43 per cent when it was listed on the Hong Kong Stock Exchange on 17 December 1997. On 5 July 1998, Dragonair Flight 841 from Chongqing was the last scheduled arrival at Kai Tak Airport, landed runway 13 at 15:38 GMT (23:38 Hong Kong time).[4][8][11][12]

Operational expansion

In 2000, the airline commenced an all-cargo service to Shanghai, Europe and the Middle East using a leased Boeing 747-200 freighter and a service to Osaka was added in May 2001. The airline purchased two Boeing 747-300 freighters in 2001 and extended freight operations to Xiamen and Taipei in 2002. The airline's net profits rose 60 percent to HK$540 million in 2002, with cargo operations accounting for 30 percent of revenues; and freight volume increasing nearly 50 percent to 20,095 tonnes.[4][8]

All regular flights were converted to scheduled services in March 2000, with passenger service to Taipei, Bangkok and Tokyo commenced in July 2002, November 2003 and April 2004, respectively. Dragonair Cargo continued to see steady growth and the airline began a Hong Kong–Shanghai freight route on behalf of DHL in June 2003 and leased an Airbus A300 freighter to start a cargo service to Nanjing in June 2004. A second daily European loop to Frankfurt and London, in addition to Manchester and Amsterdam, followed, and by mid 2004, the airline had five Boeing 747 freighters and 26 Airbus passenger aircraft. In a bitter Air Transport Licensing Authority (ATLA) hearings in 2004, Cathay Pacific applied to fly to three mainland cities to which Dragonair filed an objection, saying the move would have an effect on its very survival.[4][8][13]

A new passenger service to Sydney was scheduled to open in the second half of 2005, along with Manila and Seoul as the other anticipated destinations. The airline also planned services to the United States in 2005, at first with cargo flights. It was the airline's intention to more than double its freighter fleet to nine Boeing 747s by 2008.[4]

Cathay Pacific takeover

By 2005, Cathay Pacific owned 18 per cent with its parent, Swire owned 7.71 per cent; China National Aviation Holding owned 43 per cent and CITIC owned 28.5 per cent. The South China Morning Post reported in March 2005 that Swire Pacific was in advanced negotiations that would see Cathay Pacific taking over Dragonair.[14][15] This was dismissed outright by Tony Tyler, then chief operating officer of Cathay Pacific who said "We have no plans to change that structure right now... we are happy with the structure of the shareholding in Dragonair at the moment." Peter Hilton, transport analyst at Credit Suisse First Boston, said Tyler's remarks were a "cut and dried" dismissal of the takeover talk.[16]

On 28 September 2006, Dragonair became a wholly owned subsidiary of Cathay Pacific after completion of a major shareholding realignment involving Cathay Pacific, Air China, China National Aviation Corporation, CITIC Pacific and Swire Pacific.[17] Cathay Pacific claimed that Dragonair would continue to operate as a separate airline within the Cathay Pacific group, maintaining its own Air Operator's Certificate and with the brand unchanged, with 2,976 employees worldwide. However, the airline would be downsized with five percent of the airline staff retrenched or transferred into Cathay Pacific. No Cathay Pacific staff were to be affected by this announcement.[18][19][20][21]

By 2009, services to Bangkok and Tokyo, and the expansion plans to introduce services to Sydney, Seoul and the United States, had been cancelled and terminated while Cathay took over these routes with immediate effect. In addition, the planned nine-aircraft freight operation had also been eliminated, with three Boeing 747-400BCF freighters transferred to its parent fleet and the remaining two parked at Southern California Logistics Airport in Victorville, California.[22][23][24][25]

On 7 June 2010, Dragonair received its first second-hand Airbus A330-300 from Cathay Pacific to replace their leased A330s.

Service integration with Cathay Pacific

Dragonair's own loyalty programme, The Elite, that was launched on 12 February 2001, was merged into Cathay Pacific's Marco Polo Club from 1 January 2007. Existing Elite members were offered similar membership by The Marco Polo Club.[8][22][26] On 1 August 2007, the airline opened a joint regional office with Cathay Pacific in Beijing, that featured a dedicated area for the airline and its parent, and joined the Oneworld alliance as an affiliated member on 1 November, of which its parent is a founding member.[27][28] In addition, they opened the first airline-branded arrival lounge, The Arrival, at Hong Kong International Airport on 1 October 2008.[8] The airline's ground handling services subsidiary, Hong Kong International Airport Services Ltd (HIAS), was merged with Hong Kong Airport Services Ltd (HAS) on 1 November 2008 and became a wholly owned subsidiary of Cathay Pacific on 1 December 2008.

In January 2016, Cathay Pacific announced that it was renaming Dragonair to Cathay Dragon.[29] The Cathay Dragon brand became active on 21 November 2016.[30]

Demise

On 21 October 2020, it was announced by Cathay Pacific that as part of the restructuring due to the COVID-19 pandemic, Cathay Dragon would cease operations with immediate effect. Almost every cabin crew and pilots, along with the vast majority of the staff at the regional subsidiary, were laid off.[31][32][33]

Pre-merger fleet

Cathay Dragon operated an all–Airbus fleet in a mix of single-aisle and twin-aisle aircraft. The fleet consisted of the following aircraft prior to folding into Cathay Pacific:[99][100]

Former fleet

Awards

Hong Kong Airport Services Ltd

Hong Kong Airport Services Ltd (HAS), a former wholly owned subsidiary, provides ground handling services to the airline at Hong Kong International Airport. Their services include airside/landside operations, airport lounge, baggage services, cargo services, ramp services, ticketing & Information, station control and flight operations.[122] On 1 November 2008, HIAS was integrated into Hong Kong Airport Services Ltd (HAS), a joint venture between Dragonair and Cathay Pacific, to become one of the Asia's largest airport services providers. On 1 December 2008, HAS became a wholly owned subsidiary of Cathay Pacific.[123]