Don’t Question Hong Kong Airlines Financial Health — Unless You Want a Lawsuit

Jan 8, 2019

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

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.

Image by Emily McNutt / The Points Guy.

H/T: South China Morning Post

Featured image by Brian Kelly / The Points Guy. 

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points

TPG'S BONUS VALUATION*: $1,650

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
  • Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
  • Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.