Several Hong Kong Airlines Planes Apprehended After Missed Payments
A total of seven planes has been seized by the city’s airport authority due to some missed payments. Such an event further deepens the concerns about the future of one’s carrier whose financial difficulties nearly cost to lose its flying license.
The said seizure of the seven planes was made in accordance with the stipulated Airport Authority Ordinance. According to the governing body, there’s a specific section of the rules that addresses those who have overdue charges. In return, the authority is given the right to sell the planes if the charges are not paid within the 60 days of the detention.
As per the Hong Kong Airlines, they manage fleet consisting of 39 Airbus SE panes. Their operation remains normal though some of its aircraft have not been scheduled for operation. This is because of the arrangement with the Airport Authority.
Hong Kong’s aviation sector is known as Asia’s busiest in terms of international traffic. However, it is currently facing the toughest year due to the global financial crises after the long-month anti-China protest. The unfortunate event has driven away visitors and tipped the city’s economy into recession. Even Hong Kong’s dominant carrier, Cathay Pacific Airways, has already warned it’s bracing for a significant deterioration in their earnings.
According to Paul Yong, an analyst at DBS Group Holdings Ltd. in Singapore, an aircraft being seized is a prelude to its operations being shut down. As you will notice, load factors are running below breakeven that in-return airline companies are losing money on flights in and out of Hong Kong. What’s happening right now even at Hong Kong Airlines is no longer surprising.
Neither Hong Kong Airlines nor the Airport Authority elaborated on the details and figures on the missed payments but as per the South China Morning Post, the company may owe between HK$11 million which is equivalent to $1.4 million and HK$17.2 million for the parking and other fees.
The airline is to be the first carrier to collapse in the city after the Air Transport Licensing Authority or ATLA’s statement that it would not take any further action on Hong Kong Airlines as it raises and maintains enough funds to satisfy the regulator. Since then, authorities had been making repeated requests for the airline company to provide details regarding its financial situation following the changes to its board of directors.