Hong Kong Airlines must improve financial position or risk losing license: government

(Reuters) – Hong Kong Airlines, controlled by cash-strapped Chinese conglomerate HNA Group, must shore up its financial position by Dec. 7 or risk the suspension or loss of its license, the Hong Kong government said on Monday.

Hong Kong’s Transport and Housing Board (THB) said it met with the city’s second-largest airline on Nov. 27 and expressed “grave dissatisfaction and deep concern” that the carrier’s financial position had not improved.

THB on Monday attached new conditions to the airline’s license, requiring it to raise money and maintain certain cash levels. The Air Transport Licensing Authority said a decision on whether to suspend or revoke its license would be announced by Dec. 7.

Hong Kong Airlines did not respond immediately to a request for comment.

Airport Authority Hong Kong said it was “very concerned about the financial situation” of the airline and the potential impact on its passengers.

The airline is not publicly listed and does not disclose financial data, but in April, it told shareholders that it needed at least HK$2 billion ($255.59 million) in fresh funds or it would lose its operating license.

The carrier told them at the time it had lost HK$3 billion in 2018 and an infusion was crucial, according to people present.

Several airlines have collapsed because of financial problems in 2019, including India’s Jet Airways Ltd (NS:), Britain’s Thomas Cook and Iceland’s WOW.

Hong Kong Airlines was struggling financially even before months of anti-government protests led to a plunge in visitors to the Asian financial capital.

The airline said on Friday it would further reduce capacity, suspending flights to Vancouver, Ho Chi Minh City and Tianjin.

On Saturday, the carrier said on its website that its in-flight entertainment system would be out of service until further notice.

($1 = 7.8249 Hong Kong dollars)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.