Don't Question Hong Kong Airlines Financial Health — Unless You Want a Lawsuit
There are a number of airlines in for a rough 2019, and one of them is not taking to it kindly.
Hong Kong Airlines is said to be in troubled financial waters, but it doesn't want anybody knowing that. The airline is threatening legal action against anyone who says it's experiencing financial issues, reports the South China Morning Post.
Last week insurer Blue Cross changed its policy regarding an event if the airline went under, passengers would no longer receive compensation, therefore ginning up speculation that the carrier is at serious risk of going bankrupt. Before the policy change, Blue Cross insured travelers up to $255 USD if the airline were to fail.
The carrier, which has repeatedly said it's on stable financial ground, issued a fierce statement defending itself:
“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 rumors,” the airline said in a statement issued Saturday.
The carrier, owned by China's HNA group, which includes Hainan and a number of other airlines, has seen a large number of executives depart recently and is in over its head with debt — which is reportedly over $6.4 billion after purchasing a slew of aircraft including Airbus A350s and A330s. HNA is now even selling off stakes in Hong Kong Airlines to keep it afloat.
Hong Kong’s Air Transport Licensing Authority, which regulates airlines in the Chinese administrative region and has the power to shut them down, has ordered the carrier to "explain its financial situation." It's also been ordered to pay back $570 million in bonds by Jan. 20.
To stymy the grim financial tide, it's put a hold on new aircraft deliveries, halted the launch of new long-haul routes to London and New York and cut other flight frequencies in half.
The massive mistake fare August may have not helped the Hong Kong Airlines' bottom line, where it was selling transpacific business class for $600 round-trip. TPG has given solid marks to its business and economy class products on the its new A350.