Hong Kong Airlines to purchase Airbus A380s

Hong Kong Airlines will announce an order for Airbus SAS A380s at the upcoming Paris Air Show beginning June 20, Bloomberg reported. The new purchase signifies a further challenge to its larger rival Cathay Pacific Airways (0293.HK), as Hong Kong Airlines looks to compete on long-haul flights, traditionally a more difficult market for new entrants to break. For its part, Cathay Pacific has said that it will not purchase the A380s, instead using smaller planes for its long-haul flights. While controlling less than 10% of Hong Kong’s outbound travel market, Hong Kong Airlines said that it expects to double passenger numbers in 2011 on the back of rising demand from the China market. The company, currently controlled by the investment division of Hainan province’s government, is looking to raise funds from private equity investors in advance of a planned IPO.