No Plan To Bail Out Hong Kong Airlines: Paul Chan

Financial Secretary Paul Chan has brushed aside concerns that the government could use more public money to bail out other Hong Kong airlines, following its plan to help Cathay Pacific revamp with a HK$40 billion recapitalisation.

The government is to lend HK$7.8 billion to Cathay and buy shares worth HK$19.5 billion in the airline which has been hit hard by travel restrictions across the world due to the Covid-19 pandemic.

Cathay is also raising HK$11.7 billion from existing shareholders in a rights issue.

Reports have indicated that struggling Hong Kong Airlines also want the government to help them.

But Chan told lawmakers the two firms are not comparable. He said that Cathay was fine in terms of its operations and finance before the pandemic, but Hong Kong Airlines was already in financial trouble before the virus outbreak started in Wuhan late last year.

The secretary also said Cathay had a major market share in the aviation industry.

He rejected the idea that the government wanted to bypass Legco over the Cathay funding, and said the use of the Land Fund for investments had previously been authorised by the council.

Council Front lawmaker Chu Hoi-dick, however, noted that the fund was set up by the Provisional Legco in 1997, and Chan is the first minister to use it.

It is the only one of the eight government reserve funds which the financial secretary can tap without Legco approval, he said.