Hong Kong Airlines Faces Uncertain Future as Long-Haul Routes Are Cut, Airline Misses Payroll
Updated: Jan 11, 2020
Amid continued civil unrest, Hong Kong Airlines reported Friday that long-haul service to Vancouver, Ho Chi Minh City and Tianjin would be discontinued in February 2020.
Hong Kong Airlines (HKA) announced Friday that they would continue to review their network strategy and focus on priority routes in the face of weak travel demand. Service to Tianjin will be discontinued on February 10th, Vancouver on February 12th and Ho Chi Minh City on February 20, 2020. Customers holding reservations on these routes after the termination dates will be offered alternative arrangement options. Friday's press release stated,
“Hong Kong Airlines has been reviewing its network strategy and will continue to focus on operating priority routes under the challenging business environment cause by ongoing social unrest in Hong Kong. While the airline has already reduced its capacity and flights in the coming months, weak travel demand continues to affect its business and revenue. Hong Kong Airlines will continue to monitor the situation closely and adjust its business plan accordingly to ensure that it remains commercially viable and sustain its long-term growth.”
The South China Morning Post (SCMP) reported Friday that the airline was in emergency talks with the licensing regulators who could revoke the airline’s operating license or require a financial restructuring of the heavily leveraged carrier. Additionally, on Thursday the airline revealed that it had failed to meet payroll in November for nearly half of its 3,500 employees, though they are expected to be paid by December 6th. Earlier this month Hong Kong Airlines announced the reduction of service to Tokyo, Osaka and Seoul as well as discontinuation of service to Los Angeles after February 8, 2020. According to the SCMP, the government has contingency plans in place in the event the airline collapses during the busy holiday travel season.
Founded in 2006, Hong Kong Airlines serves 30 destinations across the Asia-Pacific and North America. The airline has 91 interline and 18 codeshare agreements and operates an all-Airbus fleet of 12 A320 Family, 21 A330 Family, and 6 A350-900 aircraft. According to the SCMP, a quarter of the airline’s 39 planes are currently grounded due to weak demand.
Source(s): Hong Kong Airlines, South China Morning Post