Hong Kong Airlines suffered another blow yesterday as a major insurer – the company that would pay out compensation to passengers in the event of its sudden collapse – withdrew its cover. Blue-Cross Asia Pacific said it would no longer offer travellers any protection if they flew with the airline.
While the insurance company is not a direct airline partner, when one pulls cover, others normally follow quickly, further undermining the HNA owned subsidiary and deterring passengers from booking with it, which just spins up the cycle of decline.
The last thing the airline needs is more negativity, but it’s not helped the situation by trying to pretend everything is OK when it’s been loosing senior managers at an unprecedented rate.
The airlines’ bad news continued with HNA Group suing the former Hong Kong Airlines CEO’s new company for HK$854m in unpaid debt, further suggesting some kind of impropriety may have been at the centre of the airlines woes.
The crisis point for the airline is due on January 20th, when it’s supposed to repay US$575m in bonds – most analysts have no idea where it will find the money, and its parent HNA Group is destitute, barely getting by itself.