Hong Kong airlines on point of collapse

Rumours abound in Hong Kong that the authorities are about to suspend Hong Kong Airlines operating licence.

Having failed to pay its Hong Kong based staff staff last week, then announcing it was ending all long haul flying, then over the weekend bizarrely reinstating the Vancouver route in January, while announcing to save costs, it was going to stop providing in flight entertainment.

The airline seems to be in a state of near chaos.

The Hong Kong authorities (ALTA) responsible for licensing said their meeting with HKA left them extremely worried that the airline was in breach of financial obligations to staff and others, and it had not done anything like enough to put its finances in order.

ALTA, as a result has given HKA a deadline to get itself refinanced, suggesting that if it fails to meet that deadline it will be grounded.

The airline has returned A350’s to lessors as it can’t pay for them, asked foreign pilots to step down and resign, stopped IFE it can’t pay for and not paid some 70% of its staff. Short of a multi-million dollar investment, it’s future looks very dim.

In many ways the crisis in Hong Kong has merely exacerbated an already dodgy position – the airline has struggled for over a year, and its now distant parent HNA Group is in no position to do anything.

ALTA will announce its decision on December 7th, and it’s not looking good.