Hong Kong Airlines Secures Funding

The already crippled Hong Kong Airlines managed to secure funding that saves the airline from losing its operating license.

Photo by David Zhang │ AeroNewsX.

On 2 December 2019, the Hong Kong Government told the airline that they must stabilize their financial position or risk losing their operating license. In order for the airline to not lose its operating license, the Hong Kong Housing and Transport Bureau (THB) demanded that the airline raise money and maintain a certain cash level.

The airline informed its shareholders that they are in need of at least HK$2 billion dollars in funding or it may lose its operating license. The airline added that they had lost at least HK$3 billion in 2018 and are in desperate need of a cash injection.

Hong Kong Airlines were already struggling even before the anti-government protests took place. The anti-government protest exacerbated the airline's financial problems as the unrest in Hong Kong caused the tourist arrivals to dwindle, causing the airline to struggle to survive as passenger numbers drop.

On Thursday, Hong Kong Airlines was not able to pay its staff salaries for November and pushed the payment back to the first week of December. The Hong Kong government then issued a notice to the airline giving them 5 days to earn some money in order for them to not lose their license.

On Friday, the airline announced that they will suspend flights from Hong Kong to Vancouver, Ho Chi Minh, and Tianjin.

On Saturday, the airline said the inflight service would be out of service till further notice.

However, on Saturday, the Hong Kong government decided not to punish the airline after it received funding that allowed the airline to pay its staff and maintain a certain cash level.

The Air Transport Licensing Authority (ATLA) said in a statement "ATLA has decided not to take not to take further action against Hong Kong Airlines for the time being pending the airline's submission of further details regarding condition one."

Hong Kong authorities said that the airline would be closely monitored and the government warned it would not rule out further action in the future, including forcing the struggling airline to cut back flights and routes.

In 2019, many major airlines have already ceased operations, including WOW Air, Thomas Cook, and Jet Airways. Besides these airlines, airlines like South African Airways (SAA) and Hong Kong Airlines are struggling to keep their head above the water, and are expected to cease operations any time soon without sufficient funding.