HNA Group has been granted a $568 million (HK4.4 billion yuan) loan by state-owned banks. The conglomerate now plans to use the money raised for salaries and financing costs of HNA Holding and affiliate airlines. However, as the conglomerate has multiple ailing carriers under its umbrella, it remains unclear whether the financial infusion will help save troubled Hong Kong Airlines.
HNA Group, a Chinese conglomerate which has approximately two dozen aviation companies, including Hainan Airlines, Hong Kong Airlines, West Air, Tianjin Airlines among others, revealed the loan in a filing to the Shanghai Stock Exchange on December 2, 2019. The funds would be used for various expenditures, including aviation fuel, aircraft leases, airport charges, of HNA Holding and its affiliated airlines.
It is not known, however, if Hong Kong Airlines is among the recipients. The carrier has said that weak travel demand, which resulted from social unrest in Hong Kong, continued to affect its business and revenue. The airline has resolved to postponing salary payments for its staff and trimming its network. However, its efforts appear to fall short as the situation has already caught the authorities’ attention.
On December 2, 2019, the Air Transport Licensing Authority (ATLA) ordered the carrier to take “proper arrangements” to improve its financial situation. Hong Kong Airlines has a week to fulfill the task ‒ until December 7, 2019. Otherwise, its licence could be revoked.
“Hong Kong Airlines is actively communicating with our shareholders and other stakeholders to meet the new requirements from ATLA as requested,” the airline announced on the same day. “We will remain professional and deliver our best customer service to all passengers.”