News
Hong Kong frustrated with HNA Group’s slow sale of Hong Kong Airlines
November 8th 2019
Airline to make ad hoc cancellations, terminate Los Angeles. Read More »
Hong Kong authorities are concerned about the lack of financial improvement at Hong Kong Airlines (HKA) as a shareholder change takes longer than expected. The HNA Group airline was expected to receive new investment from a Hong Kong and China consortium in early autumn. To date, it has not eventuated.
Hong Kong’s Air Transport Licensing Authority (ATLA) has grown more conservative and risk-averse under the administration of chief executive Carrie Lam. This position pre-dates the five months of protests in the Special Administrative Region. ATLA surprised the industry in 2017 by disciplining HK Express for pre-emptively cancelling 17 flights.
On October 25, ATLA said “HKA's financial situation has shown no sign of improvement”. On November 4, it confirmed HKA would trim its network. “The flight consolidation plan is reasonable and necessary,” ATLA said.
HKA’s statement did not say flights were being cancelled because they were unprofitable. The ad hoc cancellations, 6% of its schedule, include key routes to Bangkok and Tokyo. HKA’s Los Angeles service will be withdrawn from February, leaving Vancouver as the airline’s only long-haul service.
Hong Kong’s transport bureaucrats appear concerned about the threat of sudden HKA cancellations or a collapse of the carrier, having experienced the sudden shutdown of Oasis Hong Kong that stranded hundreds of passengers.
“The government has asked HKA to ensure proper arrangements will be put in place to take care of the interests of passengers and employees,” ATLA said.
HKA has cancelled its long-haul services to Auckland and San Francisco so it could re-deploy the capacity on higher yielding regional flights. ATLA did not say how it was supporting HKA to adjust to better markets and improve fleet utilisation.
