Hong Kong Airlines earns warning from Air Transport Licensing Authority over financial tailspin

Hong Kong’s airline licensing body on Friday warned it would take “appropriate action” in the business affairs of Hong Kong Airlines as it publicly criticised the carrier’s slumping financial performance.

The Air Transport Licensing Authority (ATLA) – a statutory body with the power to shut down carriers and approve new ones – said it told the city’s third-largest airline to take “immediate and concrete” steps to “effectively improve its financial situation” after a meeting on Friday with airlines officials.

Hong Kong Airlines has been under government scrutiny since December and the company has been the target of regular public statements urging it to repair its financial situation.

“Having considered the information recently submitted by [Hong Kong Airlines], the ATLA is of the view that HKA’s financial situation has shown no sign of improvement,” the independent licensing body said.

The carrier, backed by the debt-laden Chinese conglomerate HNA Group, saw its financial condition worsen as Hong Kong’s protest crisis intensified.

By late August, the airline warned of a severe cash-flow problem after thousands of customers cancelled trips and fewer made advance bookings.

Since that time, senior executives have taken a 20 per cent pay cut, employees have been placed on no-pay leave and the company has slashed its flight schedules.

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Hong Kong Airlines responded by saying it had implemented cost-saving methods to minimise its cash-flow woes.

“We will continue to review and adjust our operations to respond to market demands and cater to our changing business needs,” a spokeswoman said.

“Hong Kong Airlines remains committed to delivering a safe and smooth service to all our customers. We will continue to cooperate with the ATLA to provide updates as requested.”