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Regulator asks Hong Kong Airlines to further clarify finances

Hong Kong’s airline licensing authority has called for Hong Kong Airlines (HKA) to further clarify and provide supplementary information on its financial situation.

This comes after a meeting with the airline where it reviewed information on its financial state, says the Air Transport Licensing Authority (ATLA).

“ATLA will continue to assess the financial situation of HKA in accordance with regulations, and will keep in view the development and take follow-up action(s) as necessary,” it adds.

The authority requested on 21 December that HKA explain in writing its financial situation, following a series of negative news reports regarding changes to its board and concerns about its financial health.

It is understood that HKA had presented its business plan to the authority on 14 January.

Media reports have suggested that the Hainan Airlines Group-controlled carrier may struggle to meet its near-term obligations, particularly as the interest on some of its perpetual bonds falls due on 26 January. The airline has also seen a series of departures of co-chairman Zhang Kui, vice-chairman Tang King Shing and chief financial officer Jacky Lui.

Last week, HKA’s finance unit, Blue Skyview, issued a disclosure to say that it will be able to meet interest payments on time and that the airline’s business continues to operate normally after taking into account business prospects, internal resources and available credit facilities.

ATLA can revoke or suspend an airline’s licence should it deem that it has failed to meet regulations, including financial ones.

Last month, Hong Kong’s transport and housing bureau noted that there has been no abnormality in the airline’s daily operations since changes to its board.

HKA has issued three statements, assuring investors and the travelling public that it has been and will continue to operate as normal, the latest on 9 January. It has also condemned “untrue and groundless speculations” that the airline is “ceasing operation and applying for liquidation”.

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