Tag Archives for hong kong airlines.
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.”
I wouldn’t be buying tickets on the airline, and that of course creates its own self-fulfilling challenges.
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 – to pay employees and for fuel.
Hong Kong regulators have been inspecting Hong Kong Airlines for safety every couple of days, given its financial struggles, and finally gave them mere days to come up with cash or risk having the government shut them down. The deadline is Saturday.
Hong Kong’s government gave the troubled airline just 5 days “to find new cash or last-minute investors, or face having its operating licence suspended or even revoked.”
Without a new cash infusion, customers certainly shouldn’t be buying tickets on the airline, which creates its own self-fulfilling challenges.
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.
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It’s not clear who is in charge at the airline, as the carrier’s third largest owner claims to have been appointed by the board as CEO while the previous head says no such change has been made.
There aren’t just dueling chief executives but also dueling spokespeople. Over a dozen representatives of the new CEO entered company headquarters yesterday “to enforce the message about the leadership change.”
There is something to standing behind the fares that you offer. There’s something to treating consumers at least on equal footing with large corporations. That’s not how airlines usually behave and when they do they deserve admiration and respect. Today that’s Hong Kong Airlines.
Hong Kong Airlines has one of the most amazing business class fares I’ve seen in a long time. You can fly to Asia for less than $600 roundtrip. That’s a good price for coach and this is for business.
In fact you can fly Los Angeles – Shanghai between September and March for as little as $560 roundtrip in business class using Hong Kong Airlines’ daily service onboard a new Airbus A350. And Shanghai isn’t the only destination.
There’s little transparency in large Chinese conglomerates. They’re often layers of companies with unclear ownership and difficult to verify financials. Their leadership is often politically well-connected.
At the same time regulation of these entities is unclear as well. When the Chinese government decides to take an interest in the operation and systemic risks posed by these companies which rapidly expand through acquisitions both domestically and around the world, it’s not always clear whether it’s because of regulatory violations (or explicit as to which ones) or a signal of internal power struggles inside the government — whose faction is in and whose is out?
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 InsideFlyer.com, 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 »
