An acquisition/rescue by CA would be consistent with the central government’s strategy for SOEs to increase their influence in the HK economy. I’m sure it would be easy to find an SOE bank willing to back CA...

Agreed, and also with too-big-to-fail companies or companies in core industries, the banks are often mandated by the government to lend to them when they are struggling, so I wouldn't worry about the big CN airlines' liquidity.
Though I still doubt it would be CA to acquire HX since they already own a big part of CX.
CN doesn't usually put its eggs in one basket, and spreads distressed assets into a few companies (e.g. 4 AMCs to bail out the banks in the past, various banks to bail out the securities firms, IPF vs CDB to bail out Anbang/HNA).
Besides HX likely has a complicated ownership structure that could have varying opinions on any deal on the table (think similar to UO), so I wouldn't spend too much time speculating on any one possible deal.

When everyone comes begging for $ to survive, I wouldn't rely on that central government strategy to hold every time anymore. We live in extraordinary times these days ..

https://www.scmp.com/business/compan...vid-19-ravages

There won't be enough money to help everyone.

Like many other airlines, CX are trying to preserve cash. Meanwhile, HNA needs cash. CA could hold HX assets but let CX make important decisions for HX.

How would that work from a contract point of view?

A management contract, perhaps?

what assets? The aircraft are all leased, slots won’t be in short supply, crew will be available.

Actually it is the slots. HKG adopted flexible policy on use-it-or-lose-it slot rule from June last year. HX still holds the slots. By the way, the same question is also applied to Hong Kong Express, but you can see how much Cathay would like to pay for that.

CA can work as a passive investor, or appoint CX management to manage the company. HNA has done that before: sell majority stake of a subsidiary airline to local government, but they reach a deal with the government so that HNA still operates the airline. You can see it as means of financing.

Realistic? An SOE ponying up the cash but letting a foreign company (and an unpatriotic foreign company that doesn't uphold One Country Two Systems at that) run the show?

And the existing agreement between Swire and CA (presumably CITIC is out now) would then be modified to say that CA can hold CX shares so long as CX manages any HK-based carrier invested by CA?

What would happen to CX if Air China takes Hong Kong Airlines over?
 

Sources confirmed that as part of the recovery plan for HNA Group, HK Airlines will be sold to CNAC and a consortium of investors. The valuation is agreed and due diligence is in progress.

So far Air China (and the Beijing people) owns 29.99% of CX. I don’t believe mainland investors are allowed to fully own a HK registered airline. This creates a conflict of interest between CX and HX - there are some competition. Plus - how can the regulators be satisfied? Giving up slots/routes at HKG?

If HX is to be injected into CX group, Air China is already holding upper limit of CX shares. I don’t see Swire paying for HX - if they want to buy HX they would have had bought it last November.

Any speculation is pure fiction today. It depends in part on how CX will survive. CX, like all airlines, will need a massive injection of cash. Some countries seem ready to save their national airlines with taxpayer money. What about CX?

Is CX considered a national airline by the central government? I don’t think so. Is HK government going to inject cash if CX asks? Likely, as CX is important for HK economy and social stability. Would there be room for more major airlines to survive in HK? Unlikely, I think.

If CA is taking HX over, sell HKG slots to CX at a reasonable price then wind down HX orderly then it seems to be the best use of capital at the moment.

If our regulators behave like the CHP this week then CA will get any free pass they need.