Hong Kong Airlines near bankruptcy as it seeks for rescuer to pay bills
HONG KONG's Air Transport Licensing Authority (ATLA) has issued an ultimatum to Hong Kong Airlines, saying it must secure a cash injection and raise and maintain its cash and cash equivalents
HONG KONG's Air Transport Licensing Authority (ATLA) has issued an ultimatum to Hong Kong Airlines, saying it must secure a cash injection and raise and maintain its cash and cash equivalents.
'If HKA fails to improve its financial situation as required by ATLA by the deadline, ATLA will take further action,' the authority, which has the power to revoke a carrier's operating licence, said.
Following the ultimatum, parent company the HNA Group secured a US$568 million loan from state banks, which it said would be used to pay wages, aircraft leases, fuel airport charges and other costs - although it did not specify which subsidiaries the cash would go towards.
The airline reportedly failed to pay November salaries for some of its staff, delaying payment till the first week of December. The airline undertook two rounds of capacity cuts in recent weeks.
In early November, it said it was slashing capacity by six per cent as its financial problems mounted. The airline suspended Los Angeles then, and adjusted frequencies to nine other points in its network, including Osaka, Okinawa, Tokyo and Bangkok.