The airline’s latest saga surfaced on Monday after ATLA delivered its starkest warning by declaring the carrier’s financial position had “deteriorated rapidly”.

The decline prevented the airline from meeting the minimum requirements under its permit, the authority found, putting 3,500 jobs at risk and leaving the fate of tens of thousands of passengers in limbo.

Backed by Chinese conglomerate HNA Group, which also has financial problems, the airline has been forced to close routes, and is embroiled in a series of court cases in Hong Kong in which bitter shareholders are fighting for control of the company.

A filing to the Shanghai Stock Exchange late on Monday revealed that Chinese state-owned banks, including Bank of China Hong Kong, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China, had given HNA Group a HK$4.4 billion boost.

Bosses at Hong Kong Airlines given five days to save company

Chairman Cheung Shu-wang, of the Staffs and Workers Union of Hong Kong Civil Airlines, said he met with the carrier's management on Tuesday and was given the impression the sum would be used to save the airline.

Cheung said CEO Sun Jianfeng appeared to be referring to the whole sum when he said the fund would be used to pay for salaries and fuel costs.

He said Sun pledged during the meeting to try his utmost to pay salaries on time and not to lay off staff.

To protect its 3,500-strong workforce, the company would redeploy staff, stop hiring and rely on “natural loss” of employees through turnover, said Cheung, reporting comments from Sun.

Hong Kong Airlines and shareholder sued by China’s HNA Group

A source who attended the meeting said management had vented its frustration at the Hong Kong government's lack of “human touch”.

Senior figures in the company believed the offer of just five days to raise funds demonstrated a lack of flexibility by ministers, the source added, despite the airline’s good reputation.

An internal letter seen by the Post highlighted management’s concerns about low morale.

Captain Gordon Gregg, the general manager of flying, wrote to staff on Monday amid concerns for the well-being of pilots, urging colleagues not to fly if they “feel unfit for duty”.

“Reports in the news media and speculation on social media have had a devastating effect on our lives and our profession,” the manager wrote.

A pilot, who did not wish to be identified, feared they might even be stuck abroad given the company could go under at any time.

“I still need to feed my family and to ensure we can live decently. We came to Hong Kong with high hopes, but now our jobs are in trouble,” he said.

Carol Ng Man-yee, chairwoman of the Confederation of Trade Unions, told a radio programme on Tuesday that as far as she knew, payments for flight attendants’ wages were still due on time, although she did hear that some staff from other departments were told they would be paid late. Staff morale in general was “worrying”, she added.

On Tuesday, the Post contacted almost a dozen insurance companies. Only Blue Cross (Asia-Pacific) Insurance offered a “special allowance” in the case of an airline going bankrupt.

Instead of compensating for a possible cancellation, however, it paid up to HK$2,000 for the insured traveller to get a new ticket for the same destination.

Hong Kong Airlines in crisis talks as existence hangs in balance

A snapshot of the airline’s performance over the Lunar New Year 2018 showed it was due to carry 224,000 passengers between February 1 and 10.

Future travel demand would have been depressed by the overall fall in appetite for travel and the number of cuts made by Hong Kong Airlines to shrink the business since the start of the anti-government protests, which have taken hold in Hong Kong since June.

Paul Law Siu-hung, president of the International Professional Insurance Consulting Association, reminded travellers to check their insurance packages.

He suggested travel agencies which bought tickets from Hong Kong Airlines should take responsibility, and provide improved arrangements for customers amid the potential risks.

A spokesman from the Consumer Council urged the airline to be transparent by disclosing its financial and licensing status as soon as possible, and to immediately update affected passengers on the arrangements.

Bank of China Hong Kong announced on Tuesday that its travel insurance would no longer cover the winding-up of Hong Kong Airlines if travellers bought their insurance after 6pm.

Chief quits at Hong Kong Airlines as new CEO and CFO check in

Earlier, HNA Group said it would use the 4 billion yuan cash injection for aviation fuel, aircraft expenditure, operational expenses from flying, salaries and financing costs for HNA Holdings and its affiliated airlines. But it did not specifically say the loan would be used to rescue HKA, which was one of about two dozens HNA Group’s ventures.

Senior staff members speaking to the Post on the condition of anonymity said they did not trust HNA, doubting its sincerity based on what they said were empty promises they had been given on previous occasions.

There are unanswered questions about the proceeds from the sale of HK Express to Cathay Pacific for HK$4.93 billion in March, with Hong Kong transport officials promised by HNA that would go towards strengthening HKA.

There is no evidence the money was passed to the ailing carrier. HNA was contacted for comment.

Equally, other employees believed the money for HKA was nowhere near enough to return the company to profitability.