Hong Kong Airlines narrowly avoided becoming the first carrier to collapse in the city within the last ten years. The licensing authority, that is the Air Transport Licensing Authority, known as ATLA, has decided not to take further actions against the struggling company.
ATLA has asked the airline to maintain a certain level of cash injection as per the discretion of the authority. Otherwise, the airline can provide an alternate solution by the stipulated deadline. Additionally, the airline company is also required to raise and maintain its cash and cash equivalent level, as mandated by the authority.
As a part of the plan to recover, Hong Kong Airlines has created an initial plan for ensuring that there is cash injection in addition to a plan to pay deferred salaries. Amidst this burgeoning crisis, the airlines company has been unable to pay its staff and announced route cancellations to Vancuover and Ho Chi Minh City.
This mechanism is being put in place in order to keep the airline up in the air and prevent a similar situation as that of Thomas Cook Group Plc, wherein more than 150,000 tourists were stranded when the company collapsed late in September. The anti-Beijing protests have impacted the Hong Kong Airlines’ business as well because the entire recession-hit Hong Kong is not exactly the hub for business travelers at this point in time.
The city’s Transport and Housing Bureau and Civil Aviation Department has reminded Hong Kong Airlines to be alert about the shifting market winds and inform the public in a timely manner so that the employees’ interests are also taken into consideration based on the laws. As the Chinese conglomerate HNA Group Co. backed Hong Kong Airlines continued to struggle even before anti-government protests rose in the city six months ago, and the economic slump has not helped.