21 July 2018
Peach now flies direct to Okinawa from Hong Kong. Photo: HKEJ
Peach now flies direct to Okinawa from Hong Kong. Photo: HKEJ

Peach Aviation to expand its fleet amid rising demand

Budget airline Peach Aviation Ltd. plans to expand its fleet to tap increasing demand, the Hong Kong Economic Journal reported Tuesday.

The low-cost carrier, a joint venture between Japan’s All Nippon Airways and Hong Kong-based private equity firm First Eastern Investment Group, has posted a profit and is considering adding 25-30 airplanes next year, First Eastern chairman Victor Chu said.

The purchases may be funded by a capital injection, bank loans or proceeds from a possible initial public offering, Chu said, without giving details.

The budget airline launched over the weekend a route from Hong Kong to Okinawa.

The new route will break even as soon as the passenger load factor, a gauge of seat utilization, reaches 65 percent, Chu said.

Peach has a fleet of 17 aircraft, with six others booked to be delivered next year and the year after.

The additional purchase of up to 30 planes, some to replace existing aircraft, could be part of a mid- to long-term plan that would cover seven to eight years of requirements.

Peach is also considering opening more routes connecting destinations in Asia to its base in Japan.

Despite increasing competition among budget airlines in the region, Chu said, Peach will not engage in a price war, as there is still room for low-cost airlines to grow in the region, since they have a combined market share of only 10 percent.

Translation by Vey Wong

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