Troubled HK Airlines Warned By Licence Regulator

The Air Transport Licensing Authority says it may take action against Hong Kong Airlines if its financial condition does not improve in the short term.

The regulator said information submitted by the company showed no sign of improvement in its finances.

It said it had asked the company to take immediate and concrete steps to deal with the problem otherwise it will consider taking action.

The authority didn't elaborate, but its terms of reference are to grant, revoke or suspend licences.

In September, the airline announced a series of cost-cutting measures, including a four-month 20 percent pay cut for management executives. It also asked Hong Kong and mainland staff to take unpaid leave; four days a month for staff who are on or above managerial level and two days for lower ranked staff.

The airline said it had already cut flights in response to falling travel demand in the wake of, what it called, recent incidents in Hong Kong.

Hong Kong Airlines is owned by the heavily indebted mainland conglomerate HNA, which has been selling off billions of dollars of assets to try to improve liquidity.