Hong Kong’s Air Transport Licensing Authority has given Hong Kong Airlines an ultimatum: the carrier must consolidate its financial situation by December 7, 2019, if it is to retain its air operator certificate.
A day after announcing it would have to delay salary payments for half of its workforce, Hong Kong Airlines met with the Air Transport Licensing Authority (ATLA) on November 29, 2019. “If HKA fails to improve its financial situation as required by ATLA by the deadline, ATLA will take further action,” announced the authority, which could potentially mean suspending or revoking the carrier’s operating license. The ATLA will give its final decision on December 7, 2019.
The Civil Aviation Department (CAD) of Hong Kong required guarantees from the carrier that it is financially able to continue operating. “In view of the latest financial situation of HKA, including its inability to pay salaries to its entire staff in one go earlier, the CAD has great concern and has today requested HKA, which holds an AOC, to make representation on whether it is able to continue to operate stringently in accordance with the Air Navigation,” said a CAD spokesperson on December 2, 2019.
Airport Authority Hong Kong is “very concerned” about HKA’s financial situation and the impact it may have on passengers, and said it was monitoring the situation closely in order to take appropriate actions to ensure smooth airport operations.
On November 28, 2019, Hong Kong Airlines sent an internal memo saying that 1,600 employees out of 3,560 would see the payment of their wages postponed to December 6, 2019. A day later, routes towards Vancouver (YVR), Ho Chi Minh City (SGN), and Tianjin (TSN) were suspended. The carrier says its operations were “severely affected” by social unrest and the consequent weak touristic demand.
Hong Kong Airlines is under the management of the debt-ridden Chinese conglomerate HNA Group, which has been actively trying to get rid of its stake since at least December 2018. On March 27, 2019, Cathay Pacific acquired the subsidiary Hong Kong Express for $628 million.