Chapter 964: Starting an Airline

Bao Yugang pondered for a moment, and said with deep approval, 'You're right, continuing to expand our influence in the residential real estate market is the only way to make a greater impact.'

'But if we want to suppress house prices, we need to stockpile enough low-priced land in advance, otherwise when the houses are developed, we will lose money no matter how low we sell them.'

'Only if our real estate company survives can it play a role.'

Xia Yu nodded and said, 'That's right!'

'But we also need to focus on our strategy and reduce the cost of acquiring land as much as possible. The amount of capital needed to hoard land is too large.'

Bao Yugang had some ideas in mind, but he still wanted to hear what Xia Yu had in mind.

'Yu, what do you think we can do to get more land at lower cost, while also having the effect of suppressing housing prices?'

Xia Yu's mouth curled up slightly as he said slowly, 'Lao Bao, I do have some ideas.'

'We can do it like this:

'Commercial real estate is very dependent on location, so we can only take prime locations, and the supporting service facilities should be good, so as to build up quality and reputation.'

'In this regard, we can buy old buildings on a large scale in advance, and buy the vacant land in prime locations. If the Hong Kong government does not sell land, then we can buy companies that own a lot of prime land in a different way, which may be more cost-effective, just like when I bought Wharf before.'

Bao Yugang said with deep approval, 'Buying companies is a good idea. There are definitely many companies in Hong Kong whose value is underestimated. The main problem is that people don't have access to information, so they don't necessarily notice. But when it comes to business information, no one in Hong Kong is more well-informed than you. You'll have to give me some more targets in due course.'

Xia Yu laughed and said, 'That's for sure. I can't eat all of it by myself. If I eat meat, can I leave you out of it?'

Bao Yugang laughed, 'That's not what I meant. When would you ever eat meat without me? I have my current wealth, and it's all thanks to you.'

After joking around, Bao Yugang said, 'The idea of commercial real estate is very good. I can't think of a better one than yours, so let's do it your way.'

'What about residential real estate?'

Xia Yu slightly restrained his smile and continued, 'In terms of residential real estate, the main selling point of major real estate developers is still good location, convenient transportation, good supporting public facilities, and incidentally, the selling point of appreciation.'

'If we go and grab those good locations, the cost will be too high. There are too many wolves and not enough meat, and it is easy to push them to panic and drive up prices. So we can only buy in moderation.'

'Instead of developing housing in the city centre of each city, we might as well develop the suburbs on a large scale. If the transportation is not good, I might as well buy a bus company and set up bus routes directly.'

'In terms of education, we will just build schools directly. Whether they are public or private, we will see the attitude of the Hong Kong government and the extent of our public relations at that time. It doesn't matter, even if it is a private school, we can't lose.'

'The same goes for healthcare. If there is a lack of medical facilities in the vicinity and the Hong Kong government does nothing about it, then we will just open our own private hospital. The hospital industry is not bad for profit, and there is a good profit without having to make black money.'

'Then there are the various essential facilities for living, which are even less of a worry. My Wellcome supermarkets and convenience stores, Jiuding electrical appliances and other shops can completely follow the real estate market. Other shops are also very simple.'

'If everything else is similar, it only takes ten minutes longer to get to the city centre by bus, but property prices are lower by several tens of percent. I think the vast majority of ordinary citizens who are in urgent need of a home will buy our homes.'

As soon as Xia Yu finished speaking, Bao Yugang applauded: 'Ah Yu, your method is wonderful. With the current price gap between the city centres of various districts and the suburbs, if we develop properties in the suburbs, we will make a profit even if property prices are lower by half, let alone several tens of percent.'

'If we can keep most people in the suburbs, we can sell only a portion of the properties in the city centre. After all, the wealthy members of the general public in Hong Kong are only a minority.'

'Even if the properties developed in the city centre cannot be sold, the capital cannot be recovered for circulation, and several real estate developers will lose money, so the land price in Hong Kong will naturally come down.'

'Buying land in the suburbs to develop properties has the same effect on curbing housing prices as several times the same amount of money, absolutely brilliant!'

Xia Yu just smiled casually in the face of Bao Yugang's repeated praise.

'Bao, the method is good, the key is how to implement it. As long as we do it a few times, other people will discover our plan, and there will be trouble. We can't underestimate our opponents, they are all experts.'

'So we still have to hoard land in advance in large quantities, so that we won't be constrained.'

Bao Yugang nodded slightly: 'Well, there is a problem with that. Large-scale land hoarding requires a huge amount of capital. It doesn't matter if you are rich, but although I have made a lot of money with you, the investment is still not enough. We need the full support of the bank!'

Xia Yu immediately said: 'That's easy. Leave it to me. You just take the land. My bank will give you the lowest interest rate, and I guarantee that you won't lose money.'

Bao Yugang laughed heartily, 'I feel relieved to hear that.'

'When Lao Huo comes back, we'll figure it out together.'

Xia Yu nodded, 'Yes, we'll talk about it then.'

...

After a few more brief words, Bao Yugang's face became serious and he put down his cup.

Xia Yu realised that Bao Yugang might have something important to tell him, and he also perked up and looked at Bao Yugang.

'Yu, I didn't just invite you over tonight to chat about the Hong Kong government's plans, there's something more important I want to discuss with you,' said Bao Yugang solemnly.

'Especially after our conversation just now, I'm even more determined to expand the types of businesses I'm involved in.'

'I want to start an airline!'

Xia Yu's brows furrowed, and he said in puzzlement, 'Start an airline? Lao Bao, Hong Kong's civil aviation is already monopolised by Cathay Pacific.'

'The Hong Kong government has previously formulated an aviation policy of 'one route operated by one airline'. 'The first airline to obtain a licence from the Air Transport Licensing Authority will be able to obtain exclusive rights to operate flights to that destination'. Unless the Hong Kong government cancels Cathay Pacific's franchise, even if you start an airline, you can only fly unpopular routes that Cathay Pacific doesn't fly, and the risk of loss is too great!'

'And Swire Pacific, the Swire group's airline, is not only the parent company of Cathay Pacific, but also the parent company of Hong Kong Aircraft Engineering Company. The Swire group has already extended its tentacles into all aspects of the airline business, including maintenance, services and ground reception.'

'Even if you start an airline, the Swire group can completely hold you back in terms of maintenance, services and ground reception. Even if each link delays you for a few tens of minutes, your airline's reputation will be ruined.'

Xia Yu thought back to his previous life, and it seemed that in 1985, it was by Tsao Kuang-pi, Y.K. Pao, Fok Ying Tung, China Resources and China Merchants Group, etc. that Hong Kong Dragon Airlines was established. Y.K. Pao was still the largest shareholder, with a shareholding of 38%.

However, due to the Hong Kong government's policy, Dragonair could only fly unpopular routes, and its maintenance and service were inferior to Cathay Pacific's. As a result, its operations were difficult and it eventually suffered heavy losses. In 1989, Pao Yu-kong sold all his shares.

However, in this life, under his influence, Pao Yu-kong bought Jardine Air Terminal, which was considered an early entry into the air cargo market. Now that he had the idea nearly four years in advance, it was understandable.

However, Xia Yu still did not hold high expectations for Bao Yugang.

Although money can solve most problems, there are some things that are difficult to change, such as policies.

Especially when the vested interests of this policy are even stronger, it is even less likely to succeed!