The Hong Kong law on airline operation was changed since mid 2004, so there can be more than one Hong Kong-based airline serving any one airline route.

Because of this, many leading Hong Kong property developers, like Cheung Kong - Hutchison, Henderson, Sun Hung Kei, The Wharf Group, Sino Land, New World, were agreed to set up a new airline called Hong Kong Airways, so to compete with Cathay Pacific of Swire Group.

They decided to operate routes to China, SE Asia, North America, and most popular destinations of Europe like Frankfurt & London, but not routes to Australia, New Zealand, India sub-continenent, Middle East, Africa, and less popular destinations of Europe.

The also decided not to introduce any Airbus models into their fleet, and introduces only Boeing models, including Boeing B777-200ER & B777-300ER, but not any 4-engined aircrafts like B747-400. They also decided to use only General Electric Engines on their fleet because GE is the major partner of Boeing.

Hong Kong Airways had its first flight on 1st Dec 2004, and all shareholders celebrated this.

On 25 Dec 2004, the Christmas Day, a Hong Kong Airways B777-300ER flying from Toronto to Hong Kong (flight no. 888) had to perform emergency ETOPS landing at Verhonjansk, East Russia, due to the faliure of an engine in North Pole.

The temperature of Verhonjansk was -55 degrees C on that day, and 303 of 325 passengers, as well as all flight attendants, were died because of extreme cold during the 7-hour wait for emergency connection flight to Hong Kong.

On the same day, a Cathay Pacific A340-600 flying from Toronto to Hong Kong also had an engine failed in flight at North Pole, but it could fly safely to Hong Kong, with delay of only 30 minutes due to the 4-engine design of the aircraft. All passengers were safe.

The emergency landing of Hong Kong Airways 888 flight at Verhonjansk was widely reported all Asia, and 95% of all passengers booked Hong Kong Airways flights between Hong Kong & North America cancelled their flights, and changed to take Cathay Pacific, which uses only 4-engined aircraft for flights going between Hong Kong & North America.

The business of Hong Kong Airways went worse rapidly after the Flight 888 diaster, and the share prices of Hong Kong Airways shareholders fell for 30-80% on 27 Dec 2004, the first stock exchange day in Hong Kong after Christmas. Their share prices fell for 60-99% in the period from 24 Dec 2004 to 18 Jan 2005, when Cathay Pacific bought Hong Kong Airways for only HK$1.

Cathay Pacific, however, had its shareprice risen for 200% on 27 Dec 2004, and for 500% on 18 Jan 2005, the day when Cathay Pacific bought Hong Kong Airways, compared to 24 Dec 2004.

Many passengers cancelled Asia - North America flights operated by USA carriers except for United & Northwest, the only 2 USA carriers having 4-engined aircraft, after the diaster, and United / Northwest passengers changed their plans of travel so to avoid taking any such flights served by twin engined aircrafts.

The passenger amount of Cathay Pacific, China Airlines of Taiwan, China Eastern Airlines, Japan Airlines & Air Canada, which use only 3-engined or 4-engined aircrafts for Asia - North America flights, had their passenger amount rose sharply, 40% for China Airlines & China Eastern, 70% for Japan Airlines, 120% for Cathay Pacific & 200% for Air Canada.

The USA carriers were shocked after the diaster, and carriers like United, Northwest, Continental & American decided to introduce Airbus A340 for Asia - North America flights replacing B777, so to stabilize passengers' confidence. Delta, however, refused to do so, and hence cancelled its flights to Asia due to loss of passengers.

Cathay Pacific, which had its market value incrased for almost 4 times, decided to set up a Canada-based airline called Canada Pacific, to provide more service between Asia & North America with transfer hub at Vancouver, as well as USA - Canada service. It was decided to use only A340 aircrafts on Asia - Canada flights for more passenger confidence.

Boeing had its shareprice fell for 60% on 26 Dec 2004, the 1st trading day in USA after the diaster, while GE, the only engine brand of Hong Kong Airways, had its shareprice fell for 25% on the same day.

Boeing was extremely shocked of the situation of great share price fall, the loss of orders for B777 aircrafts and the change to A340 aircrafts, and made an emergency decision of developing B787, a 4-engined version of B777, and to be delivered to airlines since Feb 2009. It also relaunched MD11-ER trijets, as well as stretched version & ultra long range versions, to prevent the loss of business before the delivery of B787.

Airbus had its shareprice risen for 200% on 27 Dec 2004, the 1st trading day in France after Christmas, while Rolls Royce, the exclusive engine for A340-500/600, and the exclusive engine brand for Cathay Pacific (except for A340-300), had its shareprice risen for 100% on the same day.

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