Hong Kong Airlines gets a lifeline in the form of a cash injection

The drama of Hong Kong Airlines continues to play out – with the airline getting notice it can continue operating as per the adjusted timetables and routes

Hong Kong Airlines Survives… for now .

According to the airline

We have been notified by the Air Transport Licensing Authority (ATLA) today that it would not take further action against us for the time being. We will comply with ATLA’s requirements and all relevant regulatory requirements as always.

Our operation has been running normally and we will endeavour to serve all our passengers over the upcoming holiday season and beyond.

Hong Kong Airlines has a cash injection plan following urgent consultations with our stakeholders, including shareholders and management, who attach great importance to the airline’s long-term growth. Funding for operation will be injected into Hong Kong Airlines by phases.

Over the past year, Hong Kong Airlines has rolled out a consolidation programme to cut costs, optimize its network and elevate the customer experience. Moving forward, we will continue to drive consolidation and strengthen our internal structure to operate more efficiently and improve our revenue.

Meanwhile from the ATLA, a spokesman said

“After reviewing all the information submitted by HKA in relation to the new conditions attached by ATLA, including the fact that HKA has raised the cash and cash equivalents to the level required by ATLA and pledged to maintain the level (Condition 2), ATLA has decided not to take further actions against HKA for the time being, pending the airline’s submission of further details regarding Condition 1. In reaching the above decision, ATLA has given careful consideration to factors including public interests and the policy direction of maintaining Hong Kong as an international aviation hub.”

Le’ts break this down a bit into bullet friendly points:

• Operations continue as booked for now, with services to operate during the Christmas/New Year season and beyond
• ATLA is happy for Hong Kong Airlines to operate as is
• Cash injection arrived  from undefined sources
• The cash is to be delivered in phases
•  The network cuts that the airline has made are here to stay
• ALTA is watching the situation like a hawk still and will ask Hong Kong Airlines to improve.

The magic money tree

It seems someone found a lucky money tree, shook it hard and some cash fell on the ground for once (and if anyone has one of those money trees, you know my address). However, it’s come with no-one saying where the money has come from to fund the airline.

With the money due on tranches, we can hope the money is delivered on time and as the airline needs it.

Because right now – Hong Kong Airlines is in a rather deep hole, which it needs to climb out of step-by-step.

Whilst the airline’s short-term future is secure, it’s going to have to take a hard look at its network and see what savings and growth can be made – even with some of their fleet grounded.

Travel Advice

If you do decide to book Hong Kong Airlines for your travels (and I recommend this whenever you travel), please ensure you buy adequate travel insurance to match.

Because you never know when the worst will happen.

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