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Airlines

Hong Kong Airlines Gets a Bailout

Hong Kong Airlines Gets a Bailout
Taylor Rains

Good news for Hong Kong Airlines (HKA)—it may just get the bailout it was hoping for. For months, the carrier has been narrowly avoiding bankruptcy and has been forced to shut off inflight entertainment, nix routes, and delay salary payments. On Monday, the Air Transport Licensing Authority of Hong Kong (ATLA) gave a five-day deadline to HKA—find more investors or more cash by Saturday, December 7, or risk losing your operating license. However, as of Friday, the airline has announced that it believes it has found the money it needs to remain in business.

Cash Injection

On Monday evening, it was revealed that Chinese state-owned banks had agreed to invest HK$4.4 billion into HNA Group, HKA’s parent organization. HNA said the money would go into paying salaries, fuel, aircraft leases, and other expenditures; however, it did not specify which HNA airline would be receiving the cash. When HKA announced they are expecting a large sum of money, it became speculation that they may have been the receiver of HNA’s investors, although this is not confirmed.

The cash injection is expected to keep the airline afloat for now. HKA said in a statement, “All of our stakeholders, including shareholders and management, attach great importance to this matter. Following urgent consultations, an initial cash injection plan has been drawn up. Outstanding salary to staff will be paid on December 5, 2019, and our services will gradually resume to normal as soon as the funds arrive.”

ATLA says it is reviewing the airline’s new financial plan and will announce its decision by December 7.

Future of Hong Kong Airlines

As of now, it is unsure of how much money the airline is receiving and whether it is enough to keep them running for months or if it is just a short-term fix. Regardless, I am happy to see employees getting paid and jobs saved for now, but I am unsure if this secures the airline’s future. What do you think? Let us know in the forums!

 

[Featured Image: Benson Kua/Flickr]

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