The Hong Kong Airport Authority has seized 7 planes belonging to beleaguered Hong Kong Airlines to “protect the financial interests of both AAHK and the government.”
This won’t impinge on Hong Kong Airlines operations because the planes that have been seized were all parked and inactive (which separately underscores the challenges the airline is facing).
The aircraft, which have been stored, have not flown for three to 11 months. According to industry data, most of the planes affected are owned by the airline or a leasing company linked to its controlling shareholder, HNA Group.
The carrier’s parent company only just got a loan allowing Hong Kong’s third largest airline to continue operations.
HNA Group has been under pressure from China to divest itself of assets and pay down debt. It had racked up over $100 billion in borrowing as it went on a worldwide acquisitions spree. However it has lacked cash to invest in its businesses. And some businesses have found it difficult to make interest payments or even – like Hong Kong Airlines, before obtaining this loan – to pay employees and for fuel.
I wouldn’t be buying tickets on the airline, and that of course creates its own self-fulfilling challenges.
why wouldnt u buy tickets? insurance will pay for a far expensive close in tickets when it fails
@alan : It’s poor advice from Gary that helps the demise of companies like this: If you have insurance, buy with a credit card, you’ll be covered should a company go titsup (which is why I’m not fearful of my flights with SAA in may)
Gary appears to be favouring opinion rather than fact these days (one could argue to feed the click bait nature that this blog has taken over the last few months – Articles including Z listers, possums with accompanying opinion, and don’t forget Gary’s love of wall mounted toiletries in hotels)
I don’t know when Hong Kong Airlines will fail. If it’s within a defined period of time from ticket purchase there’s the dispute option via credit card. Some cards will bundle insurance that may NOT pay for last minute close-in tickets. And most blog readers don’t carry separate travel insurance policies (whose terms vary).
Sorry I do not think it’s advisable to book Hong Kong Airlines when there are reasonable alternatives, I would not treat them as equally viable.
Alan and Poor show, travel insurance (bought separately or thru CC coverage) does not work quite the way you think it does. If Hong Kong Airlines goes belly-up:
1. Many insurance policies will only reimburse the cost of the original ticket;
2. Most policies that include replacement flight coverage will only pay for a one-way Economy Class ticket home. And if the insurance company direct pays for that flight, the insurer will strongly favor the lowest cost airline and schedule; and
3. Even the very best insurance policies can’t create seat availability where none exists. HKG will soon enter a peak travel period (CNY, etc.) making last minute rebooking options difficult.
Therefore, Gary is right to caution against buying new tickets on HK Airlines.