HK Airlines trustworthiness at stake as insurer stops payout
Shaken by parent company’s HNA Group woes and the sudden leave of its own three high-ranking executives, the reputation of Hong Kong Airlines has suffered another blow as its insurance company announced it will stop offering allowance in case the carrier goes bust.
Starting January 7, 2019, Blue Cross (Asia-Pacific) Insurance Limited, owned by Bank of East Asia, is to stop offering cover in case Hong Kong Airlines collapses, South China Morning Post reports. Reportedly, the insurer’s decision was taken “in view of the news of the airline published by media recently”. The airline responded to the news claiming its business will not be affected by Blue Cross decision, as the two have no business partnership.
But the move surely does not help Hong Kong’s third biggest carrier’s reputation. On the one hand, the carrier’s financial situation is questioned, as it belongs to the debt-ridden HNA Group conglomerate. The group was previously reported as looking to sell (some of its) stakes in Hong Kong Express and Hong Kong Airlines.
On another hand, Hong Kong Airlines just saw a high-rank leadership change in late November-December 2018, as its co-chairman, vice-chairman and chief financial officer resigned. On top of that, the carrier has seen departures of six directors since July 2018.
Hong Kong Airlines have addressed the departures claiming they do not affect business or operations. “Hong Kong Airlines is operated by an independent Hong Kong based management team,” a statement in December 2018 read. “As a private company, Hong Kong Airlines does not disclose its financial performance publicly nor comment on market rumours or media speculation”.
Update: On January 5, 2019, Hong Kong Airlines released a statement, denying possibility of ceasing operation or applying for liquidation, calling such speculation "untrue and groundless". "The company has been and is continuing to operate as normal," the company claims, threatening legal action against "those who deliberately create these rumors" about their bankruptcy.
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