Return to 1958 and build a century-old giant

Chapter 961 Ambition in the Sky

Cao Guangbiao said, "Of course, I have consulted with the relevant departments on the mainland, and they absolutely agree with my approach and have guaranteed that they will provide certain support."

"What kind of support is this? Has it been put into writing?" Yang Wendong then asked.

Cao Guangbiao was taken aback for a moment, and said, "Mr. Yang, we haven't even established a company yet. It's impossible for the mainland to issue a written document to support us under such circumstances, right?"

Huo Yingdong then said, "Mr. Yang, you should be very clear about the credibility of those on the mainland. They won't go back on their word."

“Of course I know that,” Yang Wendong replied. “I certainly won’t go back on my word, but what exactly I’ll support and how much is still undecided.”
"What if they send a flower basket when your airline is officially established? Would that count as showing their support?"

Historically, Dragonair was once a formidable rival to Cathay Pacific. Although it was not quite on par with Cathay Pacific, the capital market was indeed optimistic about Dragonair because it was believed that Dragonair was backed by mainland China.

However, in reality, the support from the mainland for Dragonair is limited, especially after Cathay Pacific began attracting domestic capital and listing on the stock exchange, which rendered Dragonair meaningless.

For the mainland, they do not want British capital to control Hong Kong's aerospace market, but that's about it. If Cathay Pacific were to go public, it would be equivalent to some Hong Kong and Chinese capital controlling the aviation market.

Of course, another reason is the operational problems of Dragonair itself. It never demonstrated the ability to suppress Cathay Pacific, and over time it was naturally abandoned.

After listening, Huo Yingdong frowned and asked, "Yang Sheng, do you not think highly of Cao Sheng's business idea?"

“With Cathay Pacific already monopolizing the Hong Kong aviation market, how easy is it for you newcomers to overturn it?” Yang Wendong said after taking a sip of tea. “To achieve this, you need to be well-prepared, rather than blindly raising funds and thinking you can do it after the company is established.”
Aviation is a capital-intensive industry, and each flight involves the lives of hundreds of people. It's not like other industries where you can just throw money in and let it go if you fail.

In other industries, even if it might ultimately fail, as long as it involves British capital, he would invest some money more or less, and if it failed, he would just treat it as a game.

But the aviation industry involves countless lives; how can we joke about it like this?
He basically avoids industries with low probability of accidents but serious consequences if something goes wrong. In the early days when he first entered the shipping market, many people still relied on ships for travel, and there were many ships transporting people, but he basically didn't touch them, and that was for this reason.

A hush fell over the room. After a moment of thought, Cao Guangbiao asked, "Mr. Yang, what do you think I should do?"

Yang Wendong said: "First, you need to have a detailed plan, analyze the strengths and weaknesses of your competitor Cathay Pacific, and then plan how to operate your own Dragonair, exploit Cathay Pacific's weaknesses, seize the market first, ensure your own survival, and then consider other things."

Furthermore, since the mainland is offering support, they need to demonstrate sincerity, not just make empty promises.

Huo Yingdong asked, "Yang Sheng, your insight is known worldwide. Why don't you help us analyze this?"

“I don’t deserve such praise, but I can say whatever I want,” Yang Wendong thought for a moment and said, “First of all, Cathay Pacific has monopolized Hong Kong Airlines for decades and it’s deeply entrenched. Coupled with its relationship with the Hong Kong government, it’s almost impossible for you to compete head-on. Hong Kong’s market is too small to accommodate two large airlines.”
In addition, consumers have likely already accepted Cathay Pacific, so it would be very difficult for you to compete with Cathay Pacific for customers in the early stages. The best way is to focus on cargo transportation.
Cargo transportation falls under the commercial category. Commercial clients only consider price and time efficiency. Although Cathay Pacific also handles cargo transportation, it primarily transports passengers and cargo simultaneously. There are very few aircraft models that are solely for cargo transportation. This is your opportunity.
Specializing in cargo transportation enhances its efficiency. As a crossroads between East and West, Hong Kong now has extremely high demand for both sea and air freight.

Furthermore, cargo planes can be purchased secondhand, requiring less maintenance, and this also serves to lull Cathay Pacific into a false sense of security—a win-win situation.

After listening, Huo Yingdong nodded and said, "Yang Sheng's suggestion does sound good; the freight market is quite large."

After a moment of silence, Cao Guangbiao said, "Mr. Yang, I will carefully consider your suggestion. I can also do cargo transportation, but my original purpose in establishing an airline was to compete with Cathay Pacific for the aviation market."
If we only focus on freight transportation, it contradicts our initial goals, and in that case, I feel this business would be meaningless.

“I understand. One should always do meaningful things in life.” Yang Wendong nodded and then said, “That brings us to the issue I just mentioned: the level of domestic support. If you want to do the air transport business, you must obtain support from the mainland.”

Many people, after reaching a certain age and achieving financial freedom, may find themselves bored and develop some goals. Having goals gives them motivation in life.

Regardless of the era, many people have more wealth than they can spend, yet they still work hard on the front lines. This is because they need to develop their own careers to stimulate their lives and gain a sense of excitement.
Sometimes, Yang Wendong also felt this way. Therefore, even though the Yang family had been financially independent for ten generations, he still wanted to challenge himself, such as investing in high-end fields like automobiles and biopharmaceuticals.
On the one hand, success brings immense benefits to oneself and one's family; on the other hand, investments in biology may also be related to one's health, which is even more meaningful and valuable than making money.

Huo Yingdong asked, "Does Mr. Yang mean we should ask the domestic authorities for air route rights?"

Yang Wendong said: "Yes, you should first try to get the route rights from Hong Kong to many major cities in China, preferably exclusive ones, so that you can ensure that you have the fundamental means to compete with Cathay Pacific in the future."

"Cathay Pacific basically controls routes between Hong Kong and major overseas cities, how can you compete? The only market you can compete with is the domestic market, which is currently untapped."

Cao Guangbiao asked, "But apart from Beijing, Shanghai and Guangzhou, the economic level of other cities in China is not very good, and there is relatively little transportation between them and Hong Kong."

Yang Wendong said: "The fact that there are fewer now does not mean there will be fewer in the future. In recent years, the economy in the mainland has still developed. This is something that everyone can see without me having to say more."

There are relatively few flights now, but we can make it one flight every few days. However, we must secure the air routes. Once the mainland economy takes off, the exchanges between people and Hong Kong will inevitably become more developed.

This approach might result in losses initially, but offers some hope later. Otherwise, if you directly compete with Cathay Pacific, what hope do you have for the future?

Historically, Dragonair directly competed with Cathay Pacific, but lacked sufficient capital. As a result, it was beaten to a pulp by Cathay Pacific, and with the Hong Kong government taking sides and the mainland gradually relinquishing control, it was no wonder it failed.

Huo Yingdong pondered for a moment and said, "What Yang Sheng said makes sense, but the problem is that there are no planes available right now, and it's impossible for the country to provide flight routes. That's absolutely impossible."

Yang Wendong said, "That's right. So there's another way. For example, we can have domestic state-owned aviation enterprises participate in the investment. Once they have shares, it will be much easier for us to apply for flight routes when we have our own aircraft. At least their capital will be tied to us." Many industries, even if they have enough funds, sometimes need to bring in other capital to secure other people's resources.

Whether you can make a living alone depends on your own abilities and what industry you're in;
In Hong Kong's real estate market, Yang Wendong can comfortably monopolize the profits, which is fine. However, in some industries, it's still necessary to cultivate relationships with others.
"Let them invest?" Cao Guangbiao thought for a moment and said, "Yang Sheng, that's a good idea. I'm going to make another trip to China. But if we want to get them to invest, we'll probably have to offer some discounts."

Yang Wendong said, "That's no problem. Investment doesn't necessarily have to be capital. It can be special resources, technology, connections, etc. However, it's still necessary to make a note of it in the contract."

"Writing something like this into a contract would probably be against the rules in mainland China, wouldn't it?" Huo Yingdong was quite familiar with the situation in mainland China.
Yang Wendong said: "That's true. If all else fails, then we can only trust some verbal promises, but they need to be from higher-ups."
In a contract, some descriptive terms can be used; the key is to provide as much assurance as possible.

Often, contracts cannot write everything down; some things can only be agreed upon verbally.

Including some business deals between Hong Kong businessmen, sometimes it's just a verbal agreement, but basically no one will breach the contract, because that would affect their reputation.
Cao Guangbiao then asked, "Mr. Yang, if the mainland doesn't agree, could you agree to invest?"

Yang Wendong retorted, "You want me to agree to invest first, and then you'll look for people in mainland China and other places, right?"

Given his current fame, if he invests, other people and various capital entities will naturally place more trust in the project.

This is the deterrent power of top conglomerates, just like George Soros, who stirred up trouble in the financial market more than a decade later. Any word or investment he made could have a significant impact on the currency of a region or even a country.
Cao Guangbiao smiled and said, "We do have that idea, but we at Hong Kong Dragon also hope to truly gain Mr. Yang's support."

Yang Wendong nodded and said, "Okay, I will invest. Regardless of whether the mainland agrees or not, I still hope that you can successfully cooperate with the mainland."
As for how much to invest and what percentage of shares to acquire, that can't be decided yet, right? After all, you haven't approached anyone else yet.

“Yes, Mr. Yang, once we’ve found enough other people, we’ll then discuss the specific shareholding details,” Cao Guangbiao replied.

Yang Wendong said, "Okay, then that's settled. I can participate in part of it. I would also like to see our own Chinese planes flying over Hong Kong."

Historically, Dragonair failed.
But in this life, Yang Wendong does not want to see this scene. At his level today, he may not be able to change the general trend of Hong Kong's deindustrialization and full-scale real estate financialization, but there is still hope to change some small things.
If we can't acquire Cathay Pacific, then let's fight it out and take a piece of its flesh.

Let Cao Guangbiao test the waters first, and I will provide some funds behind the scenes. If he is able to defeat or draw with Cao Guangbiao, then I will not lose money.
If that doesn't work, then I can take over in the future and continue to fight against Cathay.

With his ability to foresee the future, as long as he secures air routes in mainland China or some less developed countries, he will be able to avoid losses.

The biggest cost in aviation is actually aviation fuel. We have already partially entered the oil industry. If we can integrate the industrial chain, we will have a stronger competitive advantage.

Huo Yingdong and Cao Guangbiao exchanged a glance, and then Cao Guangbiao said, "Okay, thank you, Mr. Yang. In addition to the investment, I also hope that Hang Seng Bank can cooperate with us and provide us with some loan support."
Mr. Yang, as you know, airlines are a capital-intensive industry; the money to buy aircraft is basically all financed through loans.

“No problem, I will ask Hang Seng to provide appropriate assistance, and the interest rate may even be lower.” Yang Wendong agreed, “I will help your airline to the greatest extent possible. I hope Mr. Cao will not let us down and can keep Hong Kong’s skies and our planes safe.”

Completely defeating Cathay Pacific is unlikely, but if they can avoid some of the mistakes in the past, they have a high chance of success in capturing a portion of the market.
Most importantly, historically, the largest shareholder behind Dragonair was Pao Yu-Kong. Although his wealth was considerable, it was still somewhat less than what he is today. Moreover, he was older at that time and may not have had such a strong desire for many things.

Now that I'm here, I'm determined to achieve this goal.

If an airline grows large, its influence can be astonishing. Just in terms of aircraft procurement, although there are only Boeing and Airbus to choose from, the choice between the two can influence the United States and Europe, so it still has some influence.

Furthermore, if successful in Hong Kong, it could serve as a springboard to acquire other airlines, thereby forming a global aviation group.

Of course, it's also possible that they will participate in domestic aviation; the specifics will depend on future policies.

Cao Guangbiao smiled and said, "Thank you for your support, Mr. Yang. With your full support, I am now much more confident."

"Haha, okay, then don't leave at noon, let's have lunch together, and then we can chat some more. Mr. Huo, you stay too, let's discuss the investment in charitable projects in China," Yang Wendong said with a smile.

After the reform and opening up, Huo Yingdong made some investments in China, but he mainly focused on various charitable causes.

Yang Wendong also intends to devote his efforts to charity, but such matters cannot be taken lightly; funds must be used wisely.

Huo Yingdong said, "Alright, Mr. Yang, I would also like to discuss this with you."

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　In 1980, the spring breeze of reform and opening up swept across the land, and a soul from the 21st century arrived in this era of earth-shaking changes.

　　Good news: I've traveled through time;

　　Bad news: They're about to go bankrupt;

　　Given a second chance at life, Zhou Wenjie is determined to climb to the top step by step and build the strongest conglomerate that spans the centuries.

　　
　
(End of this chapter)