Hong Kong Airlines’ finances have run so low that it is on the brink of losing its licence. The Air Transport Licensing Authority (ATLA) has asked the carrier to raise more cash or risk losing its licence.
According to reports, the regulators will decide whether to revoke or not revoke Hong Kong Airlines’ licence on Saturday.
Hong Kong Airlines must fulfill two conditions put forward by the regulator in order to retain its licence. The airline must secure an undisclosed cash injection set by ATLA, and then raise and maintain cash and cash equivalents, also at an undisclosed level.
Even though Hong Kong Airlines has not made its financials public since it is not a listed company, the Air Transport Licensing Authority confirmed in a statement that Hong Kong Airlines’ financial position has deteriorated rapidly.
Things are so bad for the carrier that it was forced to delay salary payments to its staff and also cut flight routes.
The carrier’s business has been heavily affected by the ongoing anti-government protests on the streets of Hong Kong. Due to the protests, which started in the month of August, the number of passengers travelling to the former British colony has reduced drastically.
According to media reports, arrivals from mainland China tumbled a record 46 percent in October. Overall, the number of passengers travelling to Hong Kong dropped by 44 percent during the period.
Recently, the Hong Kong Airlines Group announced that it has secured a loan of $568 million from state-owned banks.
According to the carrier, it will use the funds to clear salary dues, aircraft leases, airport charges, fuel dues as well as other costs incurred by the carrier.