Cathay Dragon

Early beginning

The airline was established in Hong Kong on May 24, 1985 on the initiative of Kuang-Piu Chao, the airline's present honorary chairman, 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 International 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, 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 fought vigorously to block the airline's flight-slot applications. In January 1987, the airline announced its expansion by 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.

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).

It was later discovered that Cathay Pacific was concentrating on a boom in travel elsewhere in the 1980s, and left the undeveloped mainland China market to Dragonair. Forced into accepting less-desirable routes, the young airline focused on the mainland.

1990s

In January 1990, Cathay Pacific, Swire Group 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. 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 wide-body aircraft into the Dragonair's fleet in July 1995.

A further redistribution of shares took place in April 1996, when China National Aviation Corporation purchased 35.86 percent of Dragonair and became the largest shareholder, with Cathay Pacific and Swire retaining 25.50 percent, CITIC Pacific retaining 28.50 percent and the Chao family retaining 5.02 percent. CNAC's holding was further increased to 43 percent 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).

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.

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.

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.

Cathay Pacific takeover

By 2005, Cathay Pacific owned 18 percent of the airline, with its parent, Swire Pacific owned 7.71 percent; China National Aviation Holding owned 43 percent and CITIC Pacific owned 28.5 percent. A Hong Kong newspaper reported that Swire Pacific was in advanced negotiations that would see Cathay Pacific taking over Dragonair. 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 CSFB, said Tyler's remarks were a "cut and dried" dismissal of the takeover talk.

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 Group, CITIC Pacific and Swire Pacific. Cathay Pacific claimed that Dragonair will 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 will 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.

By 2009, services to Bangkok and Tokyo; and the expansion plans to introduce services to Sydney, Seoul and the United States have been cancelled and terminated. In addition, the planned nine-aircraft freight operation has also been eliminated, with three Boeing 747-400BCF freighters transferred to its parent fleet while the two remaining parked at Southern California Logistics Airport in Victorville, California.

Service integration

Dragonair's own loyalty program, The Elite, that was launched on 12 February 2001, was merged into Cathay Pacific's The Marco Polo Club from 1 January 2007. Existing Elite members were offered similar membership by The Marco Polo Club. 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, which its parent is a founding member. In addition, they opened the first airline-branded arrival lounge, The Arrival, at Hong Kong International Airport on 1 October 2008. 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 it was rebranding Dragonair as Cathay Dragon. The Cathay Dragon brand became active on 21 November 2016.

Destinations

The airline currently operates its own aircraft to 47 destinations including 22 destinations in mainland China from its home base Hong Kong.

Codeshare agreements

Cathay Dragon has codeshare agreements with the following partner airlines:

Livery

The airline's original livery consists of a thick red-colored horizontal strip along a white-colored fuselage with a red-colored vertical stabiliser. The airline's traditional Chinese and English name and its logo are in gold color and are painted on the forward fuselage above the red horizontal strip and on the vertical stabiliser, respectively.

The previous livery is in white color with a red dragon on the cowling and on the vertical stabiliser; and the airline's name written in Chinese red lettering and in English black lettering above and below the front passenger windows, respectively. In addition, there is a 30 cm Oneworld logo next to the first left door and a Swire Group logo on the aft of the aircraft.

On 5 May 2005, Dragonair celebrated its 20th Anniversary with a new Airbus A330-300 (B-HWG) painted in a special livery. The work of art took 14 months to realise, from design tender to completed image. The special livery featured a waterside view with a junk and fishes leaping out of the water at the front of the aircraft; a red dragon spread across the fuselage in the daylight; and children playing with traditional Chinese lanterns by the waterside of an ancient village on the left side of the aircraft, representing the past. It also featured a waterside view with a Star Ferry at front of the aircraft; and a red dragon spread across the fuselage in the Hong Kong night sky, representing the present. Stanley Hui, Dragonair's CEO at the time, described the special livery "embodies the spirit of the Chinese dragons of old – a spirit that aspires to excellence". The aircraft was removed from service in February 2013, at the expiration of its lease.

In 2016, Cathay Pacific, Dragonair's Parent Company, announced that they would be re-branding Dragonair to Cathay Dragon. For this change, a new livery has been adopted. The new livery is similar to Cathay Pacific's new livery in the tail logo and font. The major difference is instead of the Cathay Pacific green theme, it has a light maroon theme. The titles say Cathay Dragon along with Chinese lettering reading the name. Dragonair's Dragon logo has been retained and appears next to the cockpit windows. Airbus A330-300, B-HYQ, was the first aircraft to wear the new livery.

Passenger

Cathay Dragon operates an all Airbus fleet in a mix of single-aisle and wide-body aircraft. The fleet consists of the following aircraft (as of August 2016):

Previously operated

Loyalty programs

Cathay Dragon shares two loyalty programs with its parent company, Cathay Pacific: The Marco Polo Club (The Club), a loyalty program, and Asia Miles, a travel reward program. Members of The Club are automatically enrolled as Asia Miles members.

Services

Food and beverages served on flights from Hong Kong are provided by LSG Lufthansa Service Hong Kong Ltd, a Dragonair associate. A variety of regional dishes, such as dim sum, Fokkien fried rice, barbecue pork with fried rice and chicken with Thai sweet chilli, is served on flights into mainland China. However, only beverages and cakes will be served in Economy Class for flights between Hong Kong and Changsha, Clark, Guangzhou, Haikou and Sanya.

The airline's in-flight entertainment system, offers video and audio channels in all cabin classes on selected Airbus A330-300 and Airbus A321-200 via personal televisions (PTVs). In addition, the airline provides a range different newspapers and magazines from around the world, including the airline's in-flight magazine Silkroad.

New cabin interior

Beginning in March 2013, the majority of the airline's fleet will be retrofitted with new Business and Economy Class seats. The seats are nearly identical to the new Regional Business Class and new Long-haul Economy Class products offered by parent company Cathay Pacific. Seats in both classes will be fitted with StudioKA (a rebranded version of the StudioCX inflight entertainment system on board Cathay Pacific aircraft), which features a 12.1-inch (Business Class) or 9-inch (Economy Class) touchscreen display, Audio/Video on Demand (AVOD), support for iOS devices, and a USB port for connectivity to other devices. In-seat power outlets will be available to all passengers. The new Business Class will feature a 21-inch wide recliner seat with 45 inches (narrowbody aircraft) or 47 inches (widebody aircraft) of pitch, while the new Economy Class will be 18.1 inches wide with 30 inches (narrowbody aircraft) or 32 inches (widebody aircraft) of pitch. The retrofitting process is expected to be complete by the end of 2014.

Subsidiaries and associates

Since its founding in 1985, the airline has been investing into airline-related servicing companies, including inflight catering, ground handling and service equipment companies.

The following are Cathay Dragon's major subsidiaries and associates: (as of 23 December 2016)

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. 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.