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Hong Kong Airlines

Hong Kong Airlines vows it’s ‘here to stay’ amid financial concerns and resignations, but licensing chiefs want to know about its finances

  • Six directors have left the firm since July, as well as a chief financial officer who has yet to be replaced
PUBLISHED : Friday, 21 December, 2018, 2:14pm
UPDATED : Thursday, 17 January, 2019, 2:11pm

Airline licensing chiefs have demanded Hong Kong Airlines explain its financial situation, it was revealed on Friday, as the carrier vowed it was “here to stay” despite a spate of departures by top executives.

In a statement on Friday night, the independent Air Transport Licensing Authority (ATLA) said it had noted recent media reports on the city’s third-biggest airline.

“ATLA has been following up on the financial situation of [Hong Kong Airlines] and has, in accordance with the regulations, requested the airline to explain the situation,” the statement read.

Six directors have left the firm since July, as well as a chief financial officer who has yet to be replaced.

The Transport and Housing Bureau said on Friday night that it noted ATLA’s actions, and that the airline had told the government about the changes to the board of directors.

“Based on our observations, there has been no abnormality in HKA’s daily operations and services since its changes to the board of directors,” the bureau said in a statement.

The carrier is controlled by debt-ridden Chinese conglomerate HNA Group, which has been seeking to offload part of its stake in it.

The carrier’s marketing chief George Liu Jiang turned to Twitter on Friday to speak out – the first executive to do so.

“Yes, we had a few executives who left us recently, but we also had new, experienced and international-minded leaders join us. Hong Kong Airlines is operating as normal. We are here to stay and remain committed to sustaining our long-term growth,” he said.

In a statement released on Friday morning, the airline pushed back against recent media coverage questioning the health of its balance sheet, saying it had no reason to provide operational or business information since it was not a publicly traded firm.

Exodus of top brass from Hong Kong Airlines even bigger than first thought

“As a private company, Hong Kong Airlines does not disclose its financial performance publicly nor comment on market rumours or media speculation,” the statement read.

“The recent changes to Hong Kong Airlines’ board of directors have no impact on its business or operations. Hong Kong Airlines is operating as normal and remains committed to offering our best service.”

The company said it had been an “extraordinary year” in which the number of passengers was set to hit 7.64 million by December 31.

The airline was also set to hit its revenue target for the year, the statement said, without elaborating.

But Hong Kong-based independent aviation analyst Will Horton said the airline’s argument that disclosure was not necessary was out of step with other privately owned carriers of the same structure.

HNA Group-controlled Hong Kong Airlines hit by three high-level resignations

“Emirates, which is multiple times the size of Hong Kong Airlines, has for many years published full accounts biannually. Emirates is under no obligation to disclose but reckoned transparency was needed for credibility,” Horton said.

Local media have reported that Hong Kong Airlines must repay HK$4.5 billion (US$575 million) in bonds by January 20, and the reports suggested the task would be challenging.

The Post has used third-party information from data and aviation publisher FlightGlobal as well as previous statements from Hong Kong Airlines to assess the company’s performance.

The data implies that planes have been operating further from capacity as the airline’s expansion gathers pace and it adds more and bigger aircraft.

In 2016 the carrier said it flew 6.6 million passengers, with planes 82.5 per cent full. The following year those figures were 7 million and 80.7 per cent. For the whole of 2018 the airline is projected to carry 7.64 million travellers, with an estimated load factor of 80.5 per cent.

The firm has a fleet of 38 passenger planes flying to 36 destinations.