Hong Kong Airlines settles lease payment

PUBLISHED : Thursday, 09 December, 2010, 12:00am
UPDATED : Thursday, 09 December, 2010, 12:00am

Hong Kong Airlines settled the US$2 million aircraft lease payment it owed to an NEC Capital Solutions subsidiary yesterday after the Japanese leasing company filed a petition to wind up the airline on Monday.

Team Cignus, a subsidiary of NEC Capital, leased a Boeing 737-800 to Hainan Airlines, which the latter has sub-leased to Hong Kong Airlines since 2006 at a rate of US$1.09 million for three months.

'We have paid Team Cignus today and are working with our lawyers to cross out the petition in the High Court,' Kenneth Thong, head of corporate governance of Hong Kong Airlines, said. He said Hong Kong Airlines paid Hainan Airlines the rental fee for the aircraft on time but was not sure whether the latter transferred the payment to the lessor.

According to Thong, Team Cignus, which has no direct contractual relationship with Hong Kong Airlines, said Hainan Airlines had assigned it to collect the payment from Hong Kong Airlines.

'But they have violated the procedure by filing a winding-up petition before filing a writ of summons to claim the payment,' Thong said. 'This has caused severe damage to our reputation.'

The carrier might consider legal action against Team Cignus for abuse of court procedure as well as loss of goodwill as a result of the petition, he added.

Hong Kong Airlines aims to increase its fleet size to 40 by 2012 through acquisition and leasing.