Troubled Hong Kong Airlines allowed to keep operating

Troubled Hong Kong Airlines allowed to keep operating

Hong Kong (AFP) – Low-cost carrier Hong Kong Airlines was allowed to continue flying after the city’s authorities decided Saturday not to punish it for delaying salary payments and ongoing financial problems.

The international finance hub has seen six months of protests which has dealt a massive blow to the tourism sector and airline operators.

“The Civil Aviation Department has been satisfied that Hong Kong Airlines is able to continue to operate properly and safely,” a spokesman from the Hong Kong Civil Aviation Department said on Saturday.

The city’s Air Transport Licensing Authority (ATLA) said on the same day that the airline has met the conditions for raising and maintaining its cash level. 

The authority added that it will continue to monitor the carrier’s operation closely.

In late November, the carrier said its business was “severely affected” by the social unrest in the city and a sustained weak travel demand, which also impacted its payroll.

The licensing authority later required the airline to raise a significant amount of funds with a deadline in order to prevent its financial situation from deteriorating and to protect public interests. 

Hong Kong Airlines is owned by struggling Chinese conglomerate HNA Group, which has been looking to lower its debt burden. Earlier this year, it unloaded another budget carrier — HK Express — to rival Cathay Pacific and it also cut some operations.

On Wednesday, in a letter to staff and colleagues, the carrier’s chairman Hou Wei said “an initial cash injection plan has been drawn up.” 

Although the amount of cash was not disclosed, the chairman said the company would pay outstanding salaries to staff on Thursday and the airline’s services will gradually return to normal as soon as the funds arrive.

The tourism industry in Hong Kong has been battered by nearly six months of pro-democracy protests that have become increasingly violent, with visitor arrivals falling by half.

The crisis comes as the economy was already feeling pressure from the China-US trade war. 

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