On This Day|Hong Kong’s Cathay Pacific rebrands Dragonair subsidiary in 2016 – SCMP archive

This article was first published on January 27, 2016 Exit the Dragonair as Cathay rebrands by Sijia Jiang Cathay Pacific group is likely to announce a rebranding of its Dragonair subsidiary as “Cathay Dragon” as the company seeks to strengthen its corporate identity. The idea to strengthen the sister airline’s association with the premium airline Cathay Pacific Airways has been under discussion for a few months, sources familiar with the matter told the South China Morning Post. Cathay’s manager of corporate communications, Carolyn Leung, declined to comment on whether the company had any rebranding plans for Dragonair. “Following the successful launch of Cathay Pacific’s new brand ethos and refreshed corporate identity, we have been reviewing Dragonair’s overall brand proposition. We will provide more information as appropriate.” The move would put an end to the Dragonair name which was founded by textile magnate Chow Kuang Piu in 1985. The airline was acquired by Cathay in 2006 following a major shareholding realignment involving Cathay’s parent Swire Pacific and the Air China Group. Dragonair, which has continued to operate as a separate airline within the group with its own visual identity featuring a red dragon, mainly flies to mainland China and elsewhere in Asia. Its fares are cheaper than Cathay. Sixty per cent of its passengers hold Hong Kong or mainland Chinese passports according to the company. Will Horton, senior analyst with the Centre for Aviation, said renaming Dragonair “Cathay Dragon” would be a good move at the right time, as the Dragonair brand has weak passenger recognition beyond Greater China and lacked brand association with the larger Cathay group. “What is critical is that it is not a full-on merger. Maintaining a separate regional unit will allow the group to leverage the stronger and global Cathay brand, while at the same time maintaining Dragonair’s traffic rights and lower operating cost.” The rebranding is expected to affect the airline’s visual identity across the board – most notably the aircraft livery. But it is not expected to affect Dragonair’s holding of a separate air operator’s certificate, which allows the group to maximise traffic rights usage. Horton said the move would follow a trend among Asian airline groups with multiple units starting to better leverage their brands. “This comes as Asia’s airline families start to stitch together their airlines and become integrated groups. Asia’s ‘airline’ conglomerates have had many airline licences that they haven’t necessarily used cohesively.” Since brand cohesion was inevitable, it is better to do it earlier than later when more passengers have to be re-educated,” he said. Cathay Pacific Group later confirmed the news. This article was first published on January 29, 2016. Dragonair founding family ‘sad’ to see brand change by Sijia Jiang The end of three decades of the Dragonair name and the iconic red dragon logo that adorned the planes of Hong Kong’s first local airline has stirred fond memories for the daughter of the carrier’s founder. The airline’s current owner, Cathay Pacific Group, announced on January 28, 2016 that Dragonair will be renamed Cathay Dragon, as reported by the South China Morning Post on January 26, 2016. “The name change is news to me. However, understanding how big corporations work, it does not surprise me at all,” Diana Chou, daughter of founder Chao Kuang-piu, told the Post. “If rebranding can enhance brand equity value, I am sure shareholders will vote for it,” said Chou, who remains influential in Hong Kong aviation circles and runs her own private jet business called L’voyage. “Nevertheless, it is sad that such decision has been made as I have very fond memories of how involved my father was in designing and picking the name and logo. Our family exited Dragonair many years ago. Regardless of the changes, we will always be remembered as the founders of the company,” she said. Dragonair, which became a wholly-owned unit of Cathay in 2006, has kept its brand identity largely unchanged for nearly 31 years since it was founded by textile magnate Chao in May 1985 to challenge the Swire Group airline. Its Chinese-themed livery was a stark contrast to the green of Cathay. The dragon mark will make way for Cathay Pacific’s brushwing design, although the red colouring will be retained. Cathay, together with Citic Pacific and Swire Group, bought 89 per cent of Dragonair in 1990 before eventually taking it over for HK$8.22 billion in 2006. “It is important to note that we are not merging the airlines. Cathay Pacific and Cathay Dragon will continue to be two separate premium airlines in the group, both operating under their own licences,” the group’s chief executive, Ivan Chu, said in unveiling the plan. He added that HK$100 million would be spent to promote the Cathay Dragon brand. He said the company had weighed the commercial, legal and regulatory impact of different options and concluded this was the best way to leverage the strength of both brands in the growing air travel market in and out of China. “We believe Dragonair has strong brand equity in China. Cathay Pacific actually needs to leverage the Dragonair brand in China. By 2020, 200 million Chinese are expected to fly out of China,” he said. “But also bear in mind, 130 million are expected to fly into China from different parts of the world, so we would like the Cathay brand to lend its strength to Dragonair,” he added. He added that it was “out of consideration” to make Cathay Dragon a low-cost subsidiary. There will be no changes to the airline’s cabin crew uniforms, and the first seven planes out of its fleet of 41 will be repainted this year, the company said.