Desperate Hong Kong Airlines Shuts Down Inflight Entertainment System, Can’t Pay Employees

Hong Kong Airlines was troubled long before protests erupted in the Chinese Special Administrative Region, keeping travelers away. Parent HNA Group was under strict orders to deleverage, with the government concerned about over $100 billion in debt.

HNA had problems paying for fuel. They had problems meeting interest obligations. They missed a $43 million debt payment last year and offered travel vouchers instead of cash to repay its investors.

Offer for free tickets in lieu of interest repayment

Seven months ago the chaos reached a point where there were even rival CEOs, each with their own teams, and no one even knew who was in charge.

Now, layering on the hit to revenue from Hong Kong protests, the airline hasn’t been meeting payroll and has cut back flying – even announcing plans to end its last long haul route (to Vancouver).

And in the latest desperate move they’ve even shut down their inflight entertainment system. Provider Global Eagle no doubt doesn’t want to be left on the hook paying licensing fees for entertainment while facing the prospect of not being paid themselves.

Hong Kong regulators could strip the airline of its license. It could go out of business. But it’s not clear how it has a path towards sustainability let alone profitability at this point absent an infusion of cash that would constitute more subsidy than investment.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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