Hong Kong Airlines secures operating licence

Hong Kong Airlines operates an all-Airbus fleet. Photo: © Melv_L - MACASR

Hong Kong’s Air Transport Licensing Authority (ATLA) will not take action against financially struggling Hong Kong Airlines (HKA).

In a release published on Saturday, the government agency says it held a meeting with the airline on Friday and examined HKA’s latest situation. According to the provided information, the carrier raised its available cash and finances to the level the ATLA had requested and pledged to maintain this level.

[…] ATLA has decided not to take further actions against HKA for the time being, pending the airline’s submission of further details […] ATLA has given careful consideration to factors including public interests and the policy direction of maintaining Hong Kong as an international aviation hub.Spokesperson, Air Transport Licensing Authority

The authority asks the airline to ‘improve its operational efficiency and modify its long-term operational strategy.

On Monday, the ATLA gave a deadline to Hong Kong Airlines to turn around its financial situation, after the airline ‘was unable to pay off employee salaries. It was even forced to return leased aircraft, resulting in cuts to its route network, and shut down parts of its inflight entertainment to reduce costs. Had the airline not met today’s target date, then the licensing authority could have revoked or suspended the operation certificate of HKA.

On Firday, it was reported that the company managed to receive a cash injection to catch up with outstanding salaries. It was not immediately clear whether the money received was sufficient enough to secure future operations.

Hong Kong Airlines was founded in 2006 as part of the HNA Group, which is struggling with the financial situation itself. The Chinese group which also owns multiple mainland airlines, received a loan of several hundred million Dollars from banks.

A sister airline, previously HNA-owned low-cost carrier Hong Kong Express, was acquired by competitor Cathay Pacific in March, with the takeover being fully completed in July. This makes Hong Kong Airlines the only major airline in Hong Kong that is not part of Cathay Pacific parent Swire Group.