Cathay Pacific, the flag carrier of Hong Kong, announced buying a Hong Kong-based low-cost airline Hong Kong Express from Chinese conglomerate HNA Group for $628 million. This way Cathay Pacific is set to enter the low-cost airlines market.

Under the agreement, premium airline of Hong Kong will pay $286 million for the carrier and will repay HK Express debt, which is $341 million.

Cathay Pacific sees combination of both businesses and their business models to be very efficient.

“The Transaction represents an attractive and practical way for the Cathay Pacific Group to support the long-term development and growth of its aviation business and to enhance its competitiveness”, the airline said in the statement.

Also, Cathay Pacific noted that it intends to operate Hong Kong Express “as a standalone airline using the low-cost carrier business model”.

As far as the Asian aviation market is growing dramatically fast and IATA predicts that the number of air passengers in Asia could reach 8.2 billion in 2037, airlines serving this region are actively looking for the ways to strengthen their positions in this highly competitive market.