Hong Kong Airlines Threatens To Sue Those Who Question Their Finances

Filed Under: Other Airlines

It’s a rough time for many global airlines. Not only have we seen several airlines liquidate over the past few months, but there are also rumors regarding the financial situations of some airlines that are still operating.

One of those airlines is Hong Kong Airlines. I’m a fan of Hong Kong Airlines, as I flew them last year from Hong Kong to Los Angeles, and had an excellent flight. I also appreciate that they compete with Cathay Pacific, as the Hong Kong market could certainly use more competition otherwise.

Hong Kong Airlines’ A350 business class

So, where have the rumors of Hong Kong Airlines’ financial situation come from? The airline is owned by HNA Group, the Chinese conglomerate that’s in debt and that has been selling off assets like crazy. This is also the company that was in the news a few months ago for allegedly not being able to finance new Airbus planes.

There were rumors that HNA Group was trying to unload their stake in Hong Kong Airlines. On top of that, the airline has seen six directors and the CFO leave the company in the past six months.

The thing is, we don’t actually know much about Hong Kong Airlines’ financial situation, since they’re not publicly traded. Several weeks back the airline had released the following statement, which doesn’t exactly put anyone’s mind at ease:

“As a private company, Hong Kong Airlines does not disclose its financial performance publicly nor comment on market rumours or media speculation.”

With the rumors continuing, the airline has taken it a step further. Over the weekend, Hong Kong Airlines issued the following statement:

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 company has been and is continuing to operate as normal. We remain committed to offering our best service to customers who have chosen to support and fly with us.

Hong Kong Airlines A330

As you can see, they’re threatening to take legal action against those who deliberately create speculation about the airline ceasing operations and liquidating.

I’ve had a lot of readers ask me for my take on the Hong Kong Airlines situation, and I’m really not sure what to make of all of this. I guess my general thoughts are that:

  • HNA Group is such a basket case of a company that I never quite know what to think of anything they own
  • I do find it interesting how Hong Kong Airlines is almost exclusively saying things along the lines of “we are operating as normal” and “our financial situation is none of your business,” rather than “we’re doing great and have the financing needed to continue operating for x amount of time,” etc.
  • Personally I’d feel comfortable booking a flight on Hong Kong Airlines; despite the rumors we’ve heard, they’ve continued to operate their schedule consistently, and it’s not like the airline is having planes repossessed

It’ll be interesting to see how the Hong Kong Airlines situation unfolds over the coming months, but for now I don’t really have any concerns.

What do you make of this entire Hong Kong Airlines situation?

(Tip of the hat to SCMP)

  1. There was a rumor reported by a HK newspaper (in Chinese) yesterday that the China Development Bank (CDB) has committed to inject cash into HK Airlines to help the airline to pay off the US$550 million bonds that are expiring on January 20. However, the airline still has couple more sets of issued bonds expiring later this year (March & December 2019).

    Certainly, if consumers decided to avoid flying them, it’d make things worse for HK Airlines and accelerate its demise. But at this point, it is clear they are in trouble, and there’s no clear path it can resolve all the debt issued by the company that are coming due this year.

  2. I was surprised that even with the mistake fare J class was basically empty on y flights last month, also it was literally impossible to get a customer service rep, I had to go to the counter in HK during my layover to address a schedule change they made.

  3. Having flown HKA, there’s something definitely -off- about them. Their terminal at HKG is beautiful, but all of my flights on them were empty (to be fair, a sample size of 2).

  4. HNA Group is no longer the largest stakeholder in HKA. The largest stakeholder in HKA is a company called Frontier Investment Partner.

  5. I have just booked a trip of a lifetime to New Zealand with them in Feb-March and now I’m incredibly nervous that it’s going to be cancelled.

    What should I do?

  6. Can’t comment on their finances, but their short-haul flights are the worst. The asian equivalent of Spirit air… Although I will say their in-flight staff are very nice and professional. But delays, customer service, etc leave a lot to be desired.

    But, as a CX FF, I appreciate they are helping to drive down local prices in the HK market which CX seems to use as their personal ATM machine..

  7. Hello Japan dear China,

    The spending spree is over. The trucks filled with cash are dry. Now lets return back to fundamental financial models.
    Can the Chinese stomach this? Its reality. Where is Anbang today? Starwood would be broke today, sold off in parts and what not if Anbang had bought them.

    Not to be the forbader of bad news, it looks like Marriott has bite off more than it can. If they don’t bring in top talent, the current management may hit dire straits. It is obvious the current management is overwhelmed and not able to handle this merger.

    They rushed their top loyalist members to decide by January 14th to choose their reward, now that site is down. Just another baff. Its becoming increasingly clear, their is a need for top level talent to be brought in to help. It is always better to do this before the runaway barge hits the dock.

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