Chao Family acquired Sir Y. K. Pao's equity stake in the airline.
Dragonair became the first Hong Kong-based airline to be admitted
as an active member of the International Air Transport Association (IATA).
Flights began to Phuket, Thailand, and a network began to take shape
with six cities in China being served on a regular charter basis.
In May, Hong Kong Dragon Airlines was established as a wholly owned
subsidiary of Hong Kong Macau International Investment Co. on the initiative
of Mr. K.P. Chao, the airline's present honorary chairman. The airline
has one aircraft, a Boeing 737-200A.
In July, Air Operators Certificate (AOC) was issued to Dragonair by
the Hong Kong Government. The airline's first flight departed Hong Kong
for Kota Kinabalu, Malaysia.