Hong Kong Airlines ordered to improve finances

Hong Kong Airlines
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Hong Kong's Air Transport Licensing Authority (ATLA) said it will suspend Hong Kong Airlines' operating license if the carrier can't shore up its finances by Saturday.

The airline's parent company, HNA Group, may have met that demand by securing a $568 million loan Monday, reported Forbes.

In a statement Monday, ATLA said that Hong Kong Airlines' financial position had deteriorated to such an extent that is has "severely" impacted the carrier's ability to pay salaries and to provide a satisfactory and reliable operation. 

ATLA said that it would require Hong Kong Airlines to make a cash injection and to raise and maintain its cash holding and cash equivalent level by Dec. 7. ATLA didn't specify how large the injection must be and how much cash the airline must have on hand.

The cash-strapped discount carrier was already experiencing significant financial difficulties prior to the pro-democracy protests in Hong Kong that began this summer. The protests, which have stunted the Hong Kong travel industry, have increased those challenges. 

Last month, Hong Kong Airlines announced that it would end its lone U.S. service (Hong Kong-Los Angeles) on Feb. 8. The move was part of a broader 6% capacity reduction. 

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