HK Airlines threatens to sue anyone spreading rumours that it's going bust
HONG Kong Airlines - the SAR's third biggest airline has threatened to sue anyone making 'untrue and groundless speculations' that it is to stop flying and be liquidated
HONG Kong Airlines - the SAR's third biggest airline has threatened to sue anyone making 'untrue and groundless speculations' that it is to stop flying and be liquidated.
Hong Kong Airlines issued a statement late last week slamming suggestions that the carrier was going bust. The legal threats came despite concerns about the health of the business, which prompted the authorities to question the company, the SCMP reported.
Talk of legal action was a warning shot in response to insurer Blue Cross, which had announced it would alter its travel policies and claims made against the carrier should it go bankrupt. Typically, clients would normally be given up to HKD2,000 (US$256) in compensation in the event an airline folded.
'We deplore the untrue and groundless speculations about Hong Kong Airlines ceasing operation and applying for liquidation. We reserve the right to take legal action against those who deliberately create these rumours,' the company said in its statement.
It has repeatedly stressed that it is business as normal for the airline and staff but developments have piled on the bad news, shaking consumer confidence in the carrier.
Hong Kong Airlines is one of two local carriers controlled by the debt-burdened Chinese conglomerate HNA Group. The other is budget airline Hong Kong Express.
After a worldwide spending spree based on borrowed money, HNA had to sell assets after becoming overloaded with debt which prompted close scrutiny from the central government.
Should Hong Kong Airlines collapse, it would mark the biggest failure linked to HNA.
Before Christmas, Hong Kong's Air Transport Licensing Authority, which has the power to shut down carriers and approve new ones, ordered the airline to explain its financial situation.
Local media reported that the airline must repay HKD4.5 billion in bonds by January 20, a task believed to be challenging for the carrier.