Regulator limits Hong Kong Airlines' expansion

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Hong Kong's civil aviation department (CAD) has imposed a condition on Hong Kong Airlines' (HKA) air operator's certificate (AOC), preventing the carrier from expanding its fleet.

On 17 July, the CAD added a condition to the carrier's AOC, listing the aircraft it currently operates. This means that HKA will not be able to operate any aircraft not listed under the AOC, until the condition is lifted by the regulator.

This is the first time the CAD has imposed such a term.

"With a very rapid expansion of HKA's aircraft fleet in recent years, the CAD considered that it was time for HKA to catch up with its current fleet size by consolidating their existing operations. Its AOC was therefore varied to reflect such a decision from the CAD," says a spokeswoman.

She further explains that HKA needs to show that it has the "necessary equipment, organisation, staffing, maintenance and other arrangements" in place "to secure the safe operation of a larger aircraft fleet".

HKA could not be immediately reached for comment.

CAD, however, was quick to point out that the added condition does not affect HKA's current operations, and that "the flight safety of HKA's operations has not been compromised".

HKA, a division of China's HNA Group, had previously said that it plans to grow into a bigger player in the market to compete with flag carrier Cathay Pacific.

Last November, it announced that it will receive more than 50 new aircraft over the next four years to expand its international and Chinese networks. It also has an order for 10 Airbus A380s, which are due to be delivered from 2015.

The carrier also has plans to raise $300 million through an initial public offering in the third quarter of this year to fund aircraft purchases and the building of a new training centre for its crew and a new headquarters at the Hong Kong International Airport.

HKA operates a fleet of 21 Airbus A330s and Boeing 737s. It has 65 aircraft on order, including Airbus A350s and A380s.