Concern once again over finances of HK Airlines, city’s third-biggest carrier

28-Feb-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

Hong Kong’s airline licensing body has expressed grave concerns over the city’s third-largest carrier after two companies sued it for more than HK$150 million (US$19 million) in unpaid fees for rented planes.

The Air Transport Licensing Authority a statutory body with the power to shut down carriers and approve new ones also requested that Hong Kong Airlines explain its financial situation.

“The Air Transport Licensing Authority is gravely concerned,” it said in a statement on Wednesday. It added that after getting the facts, it would “take necessary follow-up actions on the matter”.

The latest development came days after the Irish subsidiary of Wilmington Trust, one of the biggest trust providers in the United States, and American plane lender International Lease Finance Corporation (ILFC) took the carrier to the city’s High Court to recover unpaid fees for the rented aircraft.

The former sought to recover HK$103 million over the rental of six planes, while ILFC said the airline had failed to pay HK$47.2 million for the lease of two aircraft.

It was the second civil suit facing the carrier in a month. Earlier in February, Luso International Banking, a Macau-based lender, sued the beleaguered airline following its alleged failure to repay a $20 million loan despite repeated demands.

And Wednesday’s statement from the authority was the second time in months licensing chiefs ordered the company to explain its financial situation.

The last request was issued in December, amid an exodus of top managers and concerns that Hong Kong Airlines backed by debt-laden mainland Chinese conglomerate HNA Group could not meet a HK$550 million debt repayment in January.

The bulk of the money was then reportedly being lent by China Development Bank.

In January an insurer stopped covering people who booked with the airline. The government also considered making a contingency plan in case the company went bust during the peak travel season during Lunar New Year.

A spokesman for Hong Kong Airlines said the carrier was working with the companies it rented from, to address the outstanding issue.

“This has no impact on our business and we are operating as normal,” he said.

https://sg.news.yahoo.com/concern-once-again-over-finances-085906844.html

 


Category: Hong Kong

Print This Post