Uh Oh: Hong Kong Airlines Can’t Afford To Pay Staff

Filed Under: Other Airlines

Hong Kong Airlines is Hong Kong’s third largest airline, and they’ve been struggling financially for quite a while. The airline has been working on cutting costs, and that has included them cutting many routes, including discontinuing service to the US.

Hong Kong Airlines A350 business class

The airline was struggling financially long before the Hong Kong protests, but not surprisingly that has only made their situation worse.

As noted by Danny Lee, Hong Kong Airlines is struggling to pay their employees on-time this month. In a memo, the company said that they can’t afford to pay all November salaries on-time, but will have to delay payment for many staff until December 6.

The company has about 3,560 employees, and 1,600 of those staff won’t be paid on-time. The only staff being paid on-time will be cabin crew and overseas staff, while all other staff will have payments delayed.

As the company explained to employees:

“Hong Kong Airlines’ business has been severely affected by the social unrest and a sustained weak travel demand. With November being a low travel season as well, our revenue has reduced significantly, affecting our payroll for the month.

We understand that this arrangement may cause you inconvenience and sincerely apologise for it. We hope to seek your continued support to help Hong Kong Airlines overcome the current challenges.”

Hong Hong Airlines A330

While no doubt the current situation has been a big issue, the added problem is that winter can often be a period of weaker demand as well, so if the company is struggling to pay salaries in November, it seems like the situation could get even worse in the coming months.

Hong Kong Airlines has already grounded planes, laid off employees, and has forced other employees to take unpaid leave.

Since the company seems to have a cash flow issue and be relying on ticket sales to pay employees, that also doesn’t bode well for the future of the airline. I imagine this situation will further alarm those considering booking Hong Kong Airlines, causing this problem to continue.

Hong Kong Airlines A320

I really enjoyed my Hong Kong Airlines experience when I flew with them, but this sure doesn’t seem good

Comments
  1. Will it go the way of Jet Airways? HNA Group has plenty of airlines in the mainland (at least ten), but it won’t pull the plug on them right yet.

  2. Hong Kong Airlines is indeed Hong Kong’s second largest airline. I believe Ben is counting Cathay Dragon as a separate airline from Cathay Pacific, which isn’t the reality in economic / market share terms.

  3. As of March, 2019:
    seat share from HKG
    31.2% – Cathay Pacific
    15.9% – Cathay Dragon
    9.9% – Hong Kong Airlines
    5.1% – HK Express
    2.6% – China Airlines
    2.3% – China Eastern
    source: Diio

  4. Cathay Dragon has its own AOC (Air Operating Certificate) separate from Cathay Pacific’s AOC, so despite being a wholly owned subsidiary of Cathay Pacific, it is an entirely separate airline from a regulatory point of view.

  5. I’m guessing that they can sell extra airplanes. AA and UA need extra planes because of the 737 grounding and their 2020 expansion plans. Other airlines are in the market for extra planes too.
    This could also be a chance for another carrier that wants to buy a 49% equity stake in a Hong Kong based airline.

  6. My gf just resigned as a fight attendant from HU, the largest airline in the HNA group. She’s still awaiting layover money that’s owed to her from as far back as March.

    I’ve qualified for AS 75k 3 years in the row flying nothing but HU, but after learning how horribly this company treats their employees, I’ve taken a moral stand against flying them ever again. It’s easy to offer $1200 business class fares when only your foreign pilots are getting paid on time.

  7. Tried to buy tickets with them several times recently and they just wouldn’t take my money. Horrible website, worse phone system where agents tell you to go online and the server crashes, or something, after wasting time inputting all my info. Went with another, better, airline and direct flight instead…

  8. What would you suggest that I do with the 35,000 miles that I have in their FF program. I don’t have any plans on going to Asia until next fall, at the earliest. I could use them easily on Alaska Airlines, if I could do it over the phone. I can’t lid into the Hong Kong Airlines website.

  9. @Voldoo, this is just kind of caos or cascade situation that if they do not have money, they certainly could not pay you guys well; then you guys do not feel well, then the service will be influenced, then financially even more struggling. I hope they will find a way out as it was really a decent airline when it used to be financially better.

  10. Probably part of the reason why VA has been interlining with NH instead of HX for flights to Japan. (at least until March 2020 when VA’s own non-stop flights from BNE and codeshare arrangement with NH from SYD/PER to HND and beyond kicks in).

  11. Hainan Airlines and its subsidiaries will ultimately have to be taught the lesson of not overexpanding by the market…

  12. I flew HK Airlines twice. People super sweet, but the airline is fucked up. They sell whole legs of ham from Spain in their on board duty free. A bit worn planes. Sorry. Much more friendly, even if maybe as seasoned as CX crews though. For the price I would do it again. They fly business fully declined with bubbles within Asia at CX economy flights on some routes.

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