The Hong Kong Air Transport Licencing Authority has laid down its requirements to Hong Kong Airlines for its licence and survival.
And there’s limited time to secure the future of the airline.
The statement asks for Hong Kong Airlines to improve its financial situation, based on the failure to meet paying salaries or as they describe it ” probability of providing a satisfactory service under its licence in respect of continuity and regularity of operation”
The new conditions have been attached to Hong Kong Airlines Licence, with a deadline of 7th December – just five days to save the airline.
According to the agency, If HKA fails to improve its financial situation as required by ATLA by the deadline, ATLA will take further action under Regulation 15E of the Regulations, which provides for revocation or suspension of licence.
The move by the ATLA puts 3,500 employees at risk of losing their jobs if Hong Kong Airlines does not gain enough backing or liquidity.
In quotes
A spokesman for Hong Kong Air Transport Licencing Authority said,
“After careful consideration of the financial position of HKA at present, ATLA must take immediate and resolute action to prevent further deterioration of HKA’s situation in order to protect public interests. In accordance with the two new licence conditions attached by ATLA, HKA must, by a deadline set, ensure cash injection at a level determined by ATLA (or provide an alternative to the satisfaction of ATLA), and raise and maintain its cash and cash equivalent level as stipulated by ATLA.”
Where can the money come from?
A very good question. Hong Kong Airlines has been some straits for some time and investors have not been forthcoming. One of those sources could be HNA Group – the parent of Hong Kong Airlines. HNA Group has been restructuring itself as it attempt to climb out of its own fiscal hole – but so far, no money has appeared from them to save the airline.
Then – of course – there are outside investors. However, these have been less than forthcoming in the past months… and there’s nothing to say more are coming forward now in this time of need for the airline.
Whilst the future of HK Express (which used to be owned by HNA Group – now Cathay Pacific Group) is secure, the future of Hong Kong Airlines is a lot less clear.
Kevin’s Travel Advice
For now, Hong Kong Airlines is operating flights as normal. However, if you have flights beyond Friday/Saturday, start planning contingencies.
And yes, that means ensuring you have appropriate travel insurance and making sure that you are in a position to make reservations on other airlines if needed.
Because unless Hong Kong Airlines gets a cash injection, is magically purchased by another organisation or HNA Group finally comes to the rescue, you might need those options in a hurry…
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