Hong Kong mogul Bill Wong looks beyond Covid-19, ready to hire pilots as he prepares Greater Bay Airlines for take-off

Bill Wong Cho-bau, a Hong Kong tycoon who invests heavily over the border, is making a HK$2 billion (US$258 million) bet with his launch of a new city airline that will focus on a region expected to recover fastest from the coronavirus pandemic.

He hopes his Greater Bay Airlines (GBA) will get approval from Hong Kong authorities to take off next summer, and it will start with three Boeing 737 jets.

At a time when global airlines are reeling from the pandemic, which has paralysed international travel, grounded aircraft and led to massive job cuts, including in Hong Kong, Wong expects his new airline to be ready to run five to seven jets by the end of next year, and 30 aircraft by 2025.

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“If I launch an airline in Hong Kong, I can make use of the synergy and network in the Greater Bay Area – from Shenzhen, Guangzhou and Hong Kong – and gain the most out of it,” said Wong, a property mogul who also owns Shenzhen-based Donghai Airlines.

 

Hong Kong not being eclipsed by Shenzhen, says mainland mogul Bill Wong

In an exclusive interview with the Post, Wong said he expected to spend HK$2 billion on obtaining regulatory approval, as the airline must hire staff and secure aircraft to demonstrate its safety and operational credibility. So far, HK$500 million has been spent.

He is ready to hire pilots, particularly those laid off recently from Cathay Dragon, which has been shut down by parent Cathay Pacific.

“We would like to hire them ahead of schedule, because there are so many people unemployed and so many families affected,” he said, promising pilots salaries similar to what they used to earn.

At least 300 staff are needed ahead of the airline’s launch. If all goes well, he expects the workforce to expand to 500 by the end of next year and to between 2,500 and 3,000 within five years.

Wong said the airline aimed to serve major mainland Chinese cities such as Beijing, Shanghai and provincial capitals, as well as second-tier tourism cities such as Hailar in Inner Mongolia, Urumqi in Xinjiang, and the Wudang Mountains and Yichang Sanxia in Hubei.

I have business opportunities from two billion people – 1.4 billion on the mainland and another 600 million in Asean countries

Greater Bay Airlines founder Bill Wong

Elsewhere in Asia, he has his sights on flying to Japan, South Korea, Southeast Asia and parts of South Asia and is looking at the prospects beyond the pandemic.

“I have business opportunities from 2 billion people – 1.4 billion on the mainland and another 600 million in Asean countries. We hope to gain from these flight and passenger volumes,” he said.

 

‘Hong Kong has the edge’

Wong, 62, was on a business trip to Hong Kong last month when he outlined his plans for the new venture during an interview in the boardroom of his East Pacific Holdings office in Causeway Bay.

Dubbed “Shenzhen’s Li Ka-shing” after one of Hong Kong’s wealthiest men, he also explained why he picked Hong Kong for Greater Bay Airlines and the reasons he was confident in the venture despite Covid-19, which has hammered the industry.

Offering something new to the city, the airline would be a “value carrier” providing premium service at a lower price, he said, refuting claims he intends to compete with the city’s flag carrier, Cathay Pacific, which focuses on premium travel, transit passengers and long-haul international flights.

When it came to aviation, he said, Hong Kong had an edge domestically and internationally.

“Hong Kong faces the whole world, and is an international aviation hub, a status the Basic Law promises to protect,” he said, referring to the city’s mini-constitution, which says Hong Kong will serve as a centre of international and regional aviation. “Everyone can fly from Hong Kong to China, and from Hong Kong to Asia.”

He said securing aviation rights on the mainland was “less convenient”, as much of the air space there was controlled by the military.

Hong Kong will soon have its third runway, and that could mean more opportunities for the new airline too.

Referring to the city’s “one country, two systems” principle of governance, he said: “Hong Kong is so blessed with the support of China. Hong Kong does not have to follow all rules and regulations in China.

 

Amid travel standstill, Greater Bay Airlines seeks Hong Kong approval to take off

“We also have advantages such as local pilots being able to apply easily to fly on the mainland. On the other hand, it’s very difficult for mainland pilots to work here.”

Though based in Shenzhen, Wong is also a Hong Kong resident. He said he was confident that the Hong Kong government would treat his new airline fairly, given the major investment involved, and that it would win a fair share of air traffic rights.

“We were born here, and like parents, they need to provide food and raise us. That’s its responsibility,” he said.

To get Greater Bay Airline off the ground, he has assembled a team of Hong Kong industry veterans as advisers and key personnel.

With him at the interview was his right-hand man on the project, Stanley Hui Hon-chung, former Dragonair and Hong Kong Airport Authority chief.

A number of former executives and senior managers from Cathay Pacific Airways, Hong Kong Airlines and Hong Kong International Airport, many of whom worked for Hui, have also come on board.

They include former Cathay engineering director Derek Cridland, in a consultancy role aiding its regulatory efforts to secure licensing, and former Hong Kong Airlines president Zhang Kui, who will be chief operating officer of the new airline.

Hui is a board member of Air China, which has a 29.99 per cent stake in Cathay Pacific. Asked if there was a possible conflict of interest in being involved in the launch of the new airline, Hui said he was there only to advise Wong.

“I am just helping him out, as we’ve known each other for a long time, and we are both members of the Chinese People’s Political Consultative Conference,” he said.

He added he had known for some time that Wong was keen to invest in a new airline in Hong Kong.

Hui expected the process of obtaining an air operating certificate from Hong Kong authorities, which would grant Greater Bay Airlines the right to fly passengers, to take until April.

It must apply separately to the Air Transport Licensing Authority by the end of this year for permission to begin securing traffic rights, a process expected to take about six months.

Once its planes are approved, the new airline could start flying by next June or July.

Wong was three years old when he moved to Hong Kong and once lived in the city’s worst temporary housing during the 1960s. He dropped out after finishing middle school, then started to work with his elder brother.

He returned to the mainland looking for business opportunities in the 1980s as China introduced economic reforms and opened up. He went on to set up his East Pacific Group in Shenzhen, focused on property and the hotel industry.

Married with a daughter, Wong has been called Shenzhen’s Li Ka-shing, as both men started their business empires from scratch.

In more recent years, Wong’s name turned up in a high-profile scandal centred on former Hong Kong chief executive Donald Tsang Yam-kuen.

Tsang was accused of misconduct for his failure to disclose his plans to lease a luxury flat from Wong, the landlord, around the time companies owned by Wong had their applications for a Hong Kong broadcasting licence approved by the city’s Executive Council, which Tsang chaired.

Tsang was jailed in 2017 for 18 months, but last year, the Court of Final Appeal quashed his conviction and cleared him.

Wong declined to comment on the case when approached by Hong Kong media, saying he was only a businessman.

His latest venture, Greater Bay Airlines, was born out of an idea to better connect China’s southern region by air.

We will not have first class seats for our first three planes, but mostly economy seats. But we will not call ourselves a cheap airline, [like ones that] have 20 more seats and 3 inches less legroom per row

Greater Bay Airlines founder Bill Wong

The Greater Bay Area comprises Hong Kong, Macau and nine cities in Guangdong province with a combined population of 71.2 million. Beijing has an ambitious plan to transform the region into a technology powerhouse to rival California’s Silicon Valley by 2035.

Originally, Wong thought of using helicopters to link the central business districts of Hong Kong, Shenzhen and Guangzhou. That idea later grew into a plan for a full-fledged airline, which has been in the works since early last year.

Wong was clear that his new venture would not be a resurrection of budget carrier Cathay Dragon, and in fact rejected the comparison.

He said Greater Bay Airlines would target mainly leisure travellers and aim to offer “more choices for the general public – at a lower cost, relatively economical price”.

He expected the airline to occupy a middle ground between a traditional full-service carrier such as Cathay Pacific and the low-cost travel experience.

“We will not have first class seats for our first three planes, but mostly economy seats,” he said. “But we will not call ourselves a cheap airline, [like the ones that] have 20 more seats and 3 inches less legroom per row, which are not that comfortable.”

By aiming to be a “value carrier”, the airline will share the qualities of premium carriers but allow passengers to choose to pay for extras beyond the price of their seat.

That means the airline will be able to offer lower-priced tickets, and charge separately for such items as extra baggage allowance, roomier seats or in-flight meals.

Wong said his planes would have a small business class of no more than four to eight seats and aim “to serve as many customers as possible”, with each plane seating around 170 passengers.

Political views will not be a consideration for hiring. We just hire talent and make the best use of them

Greater Bay Airlines founder Bill Wong

“We can be flexible,” he said. “We can have more business seats when we need, but my wish is to serve the general public first.”

US-based Boeing is set to come up a winner, as the new airline has signalled its intention to use 737 MAX jets at a later stage when it flies further in Asia.

For a start, it has leased three second-hand 737s for the new venture, the first of which is expected at the end of November. Given the state of the industry, his adviser Hui said, they were secured at “historic low rates”.

Donghai Airlines, which uses 23 older-generation 737s, has ordered 25 of the 737 MAX aircraft.

The Shenzhen-based carrier will play a key role in Greater Bay Airlines by sharing back-office resources, aircraft and airport equipment and training staff.

 

Job offers for pilots

With more than 500 former Dragon pilots recently made redundant, the new airline is considering hiring them to work for Donghai Airlines until the new carrier is ready to fly.

“We will try to apply to mainland authorities, so they can fly with Donghai first. But these have to be approved by the aviation regulator, so we are reaching out to understand more about the procedures,” Wong said.

Early last month, the airline placed advertisements in major newspapers to announce the recruitment.

He shrugged off concerns that the political views of potential employees might hinder hiring, particularly Cathay workers who became embroiled in last year’s anti-government protests.

“Political views will not be a consideration for hiring. We just hire talent and make the best use of them,” he said. “Technical ability and skills are what matter, but of course, do not put your political views into action at work.”

The first batch of pilots are expected to be recruited from Europe and Australia, although Wong conceded he was unsure if pilots from there would be keen to fly on the mainland.

He said the airline would provide opportunities for graduates and pay salaries similar to those at Cathay, pointing out it was a challenge for a start-up airline to attract talent.

Still, he had this message for former Cathay employees needing a job: “If you want to join my company, you can join early and fly first, at least you will have some income.”

One major hurdle that remains, however, is the coronavirus, with infections rising, declining, then surging again in countries around the world.

This has kept pandemic control measures in place, including quarantine requirements, meaning international air travel remains mostly halted.

By the best estimates, the International Air Transport Association does not expect air traffic to recover to 2019 levels until 2024.

China’s domestic sector is the only aviation market in the world that has virtually recovered from the crisis, with the virus largely under control on the mainland.

 

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Wong said his Donghai Airlines had recovered 98 per cent of its pre-pandemic business, and its 23 planes carried 15,000 people a day on 110 routes.

He acknowledged the uncertainty over international air travel and the reopening of borders, but remained optimistic.

Pointing to the way domestic air travel has bounced back in China, he said: “The mainland was successful in curbing the pandemic, with zero infections, which makes me believe humans can win against the coronavirus.”

Despite the bullish talk, Wong has experienced failure. In 2008, he invested in Hong Kong’s Digital Broadcasting Corporation (DBC), once the city’s largest digital radio broadcaster.

He shut it down in 2016 after consecutive losses and limited government support.

“All investments have risks,” he said. “With DBC, It was inevitable to suffer losses, as those were areas I was not familiar with and it was so new. Who knew you had to replace all radios for digital broadcasting?”

His investment in Greater Bay Airlines was quite different, he said, noting his 14 years’ experience in the aviation industry.

Besides, he added: “I am still confident with the business environment in Hong Kong.”

 

Source: SCMP