Hong Kong Airlines, formerly called CR Airways, is mulling the launch of passenger flights to Beijing and Shanghai after Cathay Pacific Airways started a service to Shanghai last month.

Chairman Ren Weidong said the airline has applied for rights to fly to 15 to 20 mainland and Southeast Asian destinations, and could be flying to Dalian, Qingdao and Shijiazhuang this year if it obtains licenses from Hong Kong's Air Transport Licensing Authority.

"We are preparing to apply for Beijing and Shanghai routes. We hope to fly to more destinations - not only to secondary cities but also major cities in the mainland to gain more profit," he said.

Ren said the carrier recorded a very limited profit as it owned only two aircraft. He declined to give details on when the services may be launched.

"Demand for both business and luxury travel in major cities is still strong. We are not afraid of fierce competition from existing carriers in the Beijing and Shanghai markets."

Besides Cathay Pacific and Dragonair, mainland carriers Air China, China Eastern Airlines and China Southern Airlines already service those routes. Asked what the advantage of Hong Kong Airlines was when compared with Dragonair, Ren said: "Dragonair has a good brand name. But passengers want to choose their own flavor; some like Mercedes-Benz while others like BMW."

Hong Kong Airlines has chartered eight to 10 160-seat Boeing 737-800 aircraft, which will be delivered this year. Ren said his airline's attractions would include the use of new aircraft and better inflight service. Dragonair is currently using Airbus A330 aircraft to service its secondary routes.

Hainan Airlines, the fourth-largest carrier in the mainland, picked up a 45 percent stake in Hong Kong Airlines last year from CR Airways chairman Yip Kwong. Ren said the carrier plans to expand the fleet to between 30 and 50 aircraft in the next five years.

He estimated that an extra 700 jobs would be created next year if all its expansion plans are fulfilled. It currently has 300 staff in Hong Kong.

Ren, a former general manager of Hainan Airlines, said the carrier currently has a 70 percent load factor.

"Hong Kong has 44 million passengers per annum, and we hope to gain several percent of this market," Ren said.