Hong Kong Airlines (HKA), which has recently been plagued by financial troubles, is trimming its operations by about 6%, following an intervention by the territory's civil aviation authorities.
The move to cushion any further financial impact from the city’s ongoing unrest also saw the airline suspend flights to Los Angeles, its remaining US destination, from 8 February 2020.
Cirium schedules data indicates the carrier flies four times a week to Los Angeles with its Airbus A350-900s.
In August, the carrier axed San Francisco from its network, citing changes in business plans for its North American market. It had flown the route four times weekly.
Vancouver now remains the carrier’s only destination in North America. It will, however, also be adjusting frequencies to the city, as part of a network-wide capacity cut.
In addition, the carrier is also adjusting frequencies to nine other points in its network: Osaka, Okinawa, Sapporo, Tokyo, Seoul, Haikou, Hangzhou, Nanjing and Bangkok. It states that it is doing so “in response to changing market demands”.
The carrier cites “escalating market challenges” as a key reason for the cuts. The unrest in Hong Kong, which have been ongoing for almost five months, have softened travel demand, says HKA.
“The airline has been making operational adjustments from time to time to respond to the changing market conditions. Cost-savings measures were also concurrently implemented to mitigate the financial impact on the airline,” it adds.
HKA’s move to cut capacity comes as the city’s Air Transport Licensing Authority (ATLA) said that the carrier’s financial situation “has shown no sign of improvement”.
In a statement, the ATLA adds that the situation at HKA “is a matter of concern”. It had been “closely monitoring” the situation of HKA for a period of time, having requested from the airline its financial improvement plans.
The authority last met the carrier on 25 October, after which ATLA laid out the ultimatum for the airline to shape up, or face consequences.
“ATLA decided to ask HKA to take immediate and concrete steps with a view to effectively improving the financial situation shortly. Otherwise, ATLA will consider taking appropriate action in accordance with the [Air Transport] Regulations in the light of the circumstances,” the statement reads.
ATLA can revoke or suspend an airline’s licence should it deem that it has failed to meet applicable regulations, including those around its financial position.
It last flagged HKA’s financial situation in April, in a series of statements seeking further clarification from the carrier about its financial turnaround plans.
Earlier this year, HKA was the subject of government scrutiny, after a series of media reports on board member departures, and concerns about its financial health. It is closely tied to the distressed HNA Group.