Troubled Hong Kong Airlines threatens to sue anyone starting ‘untrue and groundless’ rumours about its financial health
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Hong Kong’s third biggest airline has threatened to sue anyone making “untrue and groundless speculations” that it is going bust.
Hong Kong Airlines issued a statement on Saturday slamming suggestions that the carrier would stop flying and be liquidated. The legal threats came despite concerns about the health of the business which prompted the authorities to question the company.
“We deplore the untrue and groundless speculations about Hong Kong Airlines ceasing operation and applying for liquidation. We reserve the right to take legal action against those who deliberately create these rumours,” the company said in its statement.
It has repeatedly stressed that it is business as normal for the airline and staff but developments have piled on the bad news, shaking consumer confidence in the carrier.
Hong Kong Airlines is one of two local carriers controlled by the debt-burdened Chinese conglomerate HNA Group. The other is budget airline Hong Kong Express.
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After a worldwide spending spree based on borrowed money, HNA had to sell assets after becoming overloaded with debt which prompted close scrutiny from the central government.
Should Hong Kong Airlines collapse, it would mark the biggest failure linked to HNA.
Before Christmas, Hong Kong’s Air Transport Licensing Authority, which has the power to shut down carriers and approve new ones, ordered the airline to explain its financial situation.
Local media also reported that the airline must repay HK$4.5 billion in bonds by January 20, a task believed to be challenging for the carrier.
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Beset by financial concerns, the airline entered a “slowdown”, delaying delivery of several new aircraft, pausing the launch of new long-haul routes to London and New York and cutting the number of flights to existing destinations.
