Greater Bay Area Airlines Limited (hereinafter referred to as "Greater Bay Area Airlines"), headquartered in Hong Kong, may once again replace its CEO.
According to market news, 73 year old CEO of Greater Bay Area Airlines, Hsu Han chung, may resign in April and be succeeded by COO Wu Soo lan.
On March 22, Time Finance called Greater Bay Area Airlines regarding the change of CEO, but as of the time of writing, no response has been received.
The Greater Bay Area Airlines was founded by Chaozhou businessman Huang Chubiao, who is the chairman of Donghai Airlines Limited (hereinafter referred to as "Donghai Airlines"), a local airline in Shenzhen. Over the past decade, Donghai Airlines has also frequently changed its CEO.
From license application to official operation, Greater Bay Area Airlines has gone through two CEOs. If the above news is true, Greater Bay Area Airlines will welcome its third CEO. Since its maiden flight in July 2022, Greater Bay Area Airlines has been in operation for nearly 20 months. What have been the changes in its route development and fleet situation?
Or welcome a third family member
Recently, market news reported that Xu Hanzhong, the current CEO of Greater Bay Area Airlines, may resign in April, and COO Wu Xiulan is expected to take over. Greater Bay Area Airlines may welcome its third family member in four years.
In July 2020, an airline named Greater Bay Area Airlines submitted an application for an Aviation Operating Permit (AOC) to the Civil Aviation Department of Hong Kong; One year later, after receiving the first Boeing 737-800 aircraft, Greater Bay Area Airlines successfully obtained an aviation operator license and officially began operations in July 2022, with its first flight from Hong Kong, China to Bangkok, Thailand.
From applying for a license to officially operating, Greater Bay Area Airlines has gone through two family experiences.
In January 2021, former CEO of Cathay Pacific Dragons, Qiu Yinghua, was appointed as the CEO of Greater Bay Area Aviation. However, one year later, he was appointed as one of the key officials of the sixth Hong Kong government, serving as the Secretary for Commerce and Economic Development.
In June 2022, Xu Hanzhong, who had previously served as the CEO of Dragonair and the CEO of the Hong Kong Airport Authority, succeeded Qiu Yinghua as the CEO of Greater Bay Area Aviation.
Greater Bay Area Airlines was founded by Huang Chubiao, Chairman of Shenzhen Donghai Group Co., Ltd. (hereinafter referred to as "Donghai Group"). Huang Chubiao, known as "Shenzhen Li Ka shing", has an aviation dream. In the 1990s, Huang Chubiao founded Donghai Group in Shenzhen with the real estate industry, and then founded Donghai Airlines in 2002. Currently, the civil aviation sector is one of Donghai Group's main businesses.
Huang Chubiao was full of hope for the development of aviation in the Guangdong Hong Kong Macao Greater Bay Area during an interview in 2021: "Currently, China is vigorously promoting the urban agglomeration and regional economic construction of the Guangdong Hong Kong Macao Greater Bay Area, which will greatly promote the development of passenger flow and logistics. The future prospects of aviation development in the Guangdong Hong Kong Macao Greater Bay Area are very broad. At the same time, I am also full of confidence in Hong Kong's future, and its position as an international aviation hub will not change."
Under the same boss's control, there is frequent interaction between the two airlines. For example, Greater Bay Area Airlines and East China Sea Airlines jointly held a seasonal promotion meeting, and this year, they also launched activities such as purchasing a Greater Bay Area Airlines "free flight" ticket to exchange for a designated East China Sea Airlines route ticket.
In recent years, the frequency of changing CEOs for Donghai Airlines under Huang Chubiao's umbrella has been higher.
Time Finance found from public reports that in the past decade, at least six CEOs have changed at East China Sea Airlines, and there have been five changes in leadership from 2014 to 2018. During the period of replacing CEOs, there have been few official press releases, and instead, a new face suddenly delivered a speech as CEO at East China Sea Airlines events.
For example, in February 2021, Guo Zhiqiang was appointed as the Executive Director and President of Donghai Airlines, and there was an official press release at that time. But in January 2024, at the 2024 work conference of Donghai Airlines, Zhang Zhizhong had already made a work report as the president, and there had been no official press release of the appointment previously made public.
Will the delivery of 15 ordered 737-9s be delayed?
It has been over a year (20 months) since its official operation in July 2022. Currently, Greater Bay Area Airlines operates seven Boeing 737-800 aircraft with only seven destinations, including Bangkok, Thailand, Taipei, South Korea, Tokyo, Osaka, Vietnam, and Manila, Philippines.
In 2021, Qiu Yinghua, then CEO of Greater Bay Area Airlines, pointed out in a media interview that Greater Bay Area Airlines has applied for 104 destinations, mainly in mainland cities such as Beijing, Shanghai, Hangzhou, as well as some Asian cities such as Tokyo and Osaka.
In August 2022, Xu Hanzhong, the CEO of Greater Bay Area Aviation, also explained to the media, "Using the Greater Bay Area as the name of an airline... through our operations, we can bring the national strategy and the Guangdong Hong Kong Macao Greater Bay Area strategy to the places we will fly in the future."
However, as of the time of publication, Greater Bay Area Airlines still has no flights to the mainland. On March 22nd, a civil aviation expert told Time Finance that based on the applied flight points, Greater Bay Area Airlines only wants to fly the best routes in mainland China (popular cities, popular moments), and is currently applying for flight rights.
In addition, Time Finance learned from the Planespotters flight database that all 7 aircraft of Greater Bay Area Airlines are currently introduced through leasing, with an average age of 8 years. And among the 7 planes, 3 were previously leased for use by Donghai Airlines.
Several aircraft leasing industry professionals have told Time Finance that this is a normal business behavior. A renter told Time Finance, "Currently, there is also a shortage of airplanes on the market. When new airlines start operating, it is normal to rent some planes to meet operational needs."
In the past few years, the supply chain of the aircraft manufacturing industry has been greatly affected by the global pandemic, and major aircraft manufacturers Boeing and Airbus have had to delay the delivery of new passenger planes. The slowdown in the delivery speed of new aircraft has also led to a surge in demand for related models in the rental market, making it difficult to find a popular model. The above-mentioned civil aviation experts also pointed out that the rental prices of new aircraft models are relatively high, which will impose a greater burden on the starting airlines. Starting from old aircraft models would be a better choice.
From the perspective of aircraft model selection, Greater Bay Area Airlines did not use the more fuel-efficient Airbus A320neo or Boeing 737 MAX series newly launched by aircraft manufacturers in recent years, but the Boeing 737-800, which was first delivered to customers in 1998. Considering that fuel costs often account for nearly 30% of aircraft operating costs, this type of aircraft model selection will also weaken its competitive advantage in Hong Kong.
At the same time, the previous fleet of Donghai Airlines used the 737-800 aircraft model. After terminating the operation of the three aforementioned aircraft from 2023 to 2024, a relatively new model, the Boeing 737-8, was reintroduced from February to March this year.
Greater Bay Area Airlines has also purchased new aircraft in recent years. In March 2023, Greater Bay Area Airlines announced an intention to order 15 737-9 aircraft from Boeing, including no less than 5 787 wide body aircraft. The current market price of the 737 MAX series is about 100 million US dollars or more, which means that the total of 15 737-9 aircraft operated by Greater Bay Area Airlines may reach 1.5 billion US dollars, equivalent to over 10 billion Chinese yuan.
At that time, Greater Bay Area Airlines stated that the 737-9 would become the main aircraft type for the future fleet, to open up more routes between Hong Kong, the Asia Pacific region, and mainland cities.
However, the 737-9 had just experienced a "door detachment" incident this year. On January 5th, shortly after takeoff, an Alaska Airlines 737-9 aircraft suddenly had its left center and rear emergency hatch detached from the fuselage, causing the cabin to momentarily release pressure and all oxygen masks to fall off. After the incident, the Federal Aviation Administration (FAA) of the United States temporarily announced a ground for all 737-9s and suspended Boeing's production line expansion plan.
On January 7, 2024, Greater Bay Area Airlines stated in a statement that the emergency escape door design used in its ordered 737-9 aircraft was completely different from the one used in the aforementioned incident, and the delivery of the latest aircraft will also begin at the end of 2024. Greater Bay Area Airlines stated that it will continue to communicate with Boeing on this matter, with "flight safety as the primary consideration.".
However, the launch of the new 737-9 will also be delayed as a result.
At present, Greater Bay Area Airlines is still applying for airworthiness certification for the 737-9 aircraft from the Civil Aviation Department of Hong Kong. On January 17th, Xu Hanzhong pointed out that the certification process for (737-9) in Hong Kong will be delayed due to this incident and may take longer to complete.