Budget airline Hong Kong Express is banned from taking delivery of new aircraft and cannot add flights or destinations to its network, the city’s aviation authority announced on Thursday. The Civil Aviation Department (CAD) approved the punishment, its harshest in 20 years, after the airline cancelled dozens of flights just days before a major Chinese holiday week in October, leaving some 2,000 travellers high and dry. A report by the airline which was reviewed by the city’s aviation regulator concluded there had been lapses in the firm’s internal management and corporate governance, which included poor human resources planning, a lack of effective internal communication and an underestimation of the impact of the incident. A CAD spokeswoman said the penalty was the harshest possible, short of revoking an air operating certificate – the licence required to fly. The sanctions would only be lifted once authorities were satisfied steps had been taken to prevent a repeat incident, she said. Some 20 years ago a helicopter operator’s certificate was suspended for around three months in light of serious safety shortcomings. What is the fallout from the Hong Kong Express ‘golden week’ cancellations debacle? “Further business expansion can only be considered when the management problems are tackled at the root,” said the regulator, which provides oversight of airlines and manages aviation safety. “Hong Kong Express will only be allowed to operate new destinations and flights when the CAD is satisfied it has implemented various rectifying measures effectively.” The airline is part owned by mainland Chinese conglomerate HNA Group. The CAD said the company would need to overhaul its risk management practices, hire more cabin crew and safety trainers to ensure such incidents would not happen again, and improve communication with the public. On September 24 the airline abruptly cancelled 18 flights between Hong Kong and Seoul in South Korea and the Japanese cities of Osaka and Nagoya between October 1 and 8. The two dates marked the start and finish of the busy Chinese National Day holiday period known as “golden week”. Travel plans were ruined for some 2,000 holidaymakers. During the period the company lost critical safety personnel crucial to operating flights, which had a knock-on effect on cabin crew and left the company unable to operate legally. The regulator ordered a probe after the fiasco and then CEO Andrew Cowen and other senior executives left the firm soon afterwards. Hong Kong Express cabin crew seek to join trade union in wake of cancellation controversy In a statement on Thursday night the airline said it “will do its utmost to make improvements across the company” over the next six months. Hong Kong Express had expressed “profound regret” over the disruption, the CAD noted. Along with the restrictions came a renewal of the airline’s operating certificate for another five years, but with specific conditions tied to the licence stating that the company must make improvements. Existing flights and bookings were unaffected by the announcement of Thursday’s sanctions, however, it is unclear whether a new service to Kumamoto in Japan, due to fly from November 16, twice a week, will be allowed to get off the ground. Hong Kong Express operates a fleet of 20 Airbus single-aisle planes flying to 28 destinations mainly in Asia including in Japan, South Korea, Taiwan and Thailand.