(Reuters) – Hong Kong Airlines, controlled by cash-strapped Chinese conglomerate HNA Group, must shore up its financial position by Dec. 7 or risk the suspension or loss of its licence, the Hong Kong government said on Monday.
Hong Kong’s Transport and Housing Board (THB) said it met with the city’s second-largest airline on Nov. 27 and expressed “grave dissatisfaction and deep concern” that the carrier’s financial position had not improved.
THB on Monday attached new conditions to the airline’s licence, requiring it to raise money and maintain certain cash levels. The Air Transport Licensing Authority said a decision on whether to suspend or revoke its licence would be announced by Dec. 7.
Hong Kong Airlines did not respond immediately to a request for comment.
Airport Authority Hong Kong said it was “very concerned about the financial situation” of the airline and the potential impact on its passengers.
The airline is not publicly listed and does not disclose financial data, but in April, it told shareholders that it needed at least HK$2 billion ($255.59 million) in fresh funds or it would lose its operating license.
The carrier told them at the time it had lost HK$3 billion in 2018 and an infusion was crucial, according to people present.
Several airlines have collapsed because of financial problems in 2019, including India’s Jet Airways Ltd <JET.NS>, Britain’s Thomas Cook and Iceland’s WOW.
Hong Kong Airlines was struggling financially even before months of anti-government protests led to a plunge in visitors to the Asian financial capital.
The airline said on Friday it would further reduce capacity, suspending flights to Vancouver, Ho Chi Minh City and Tianjin.
On Saturday, the carrier said on its website that its in-flight entertainment system would be out of service until further notice.
(Reporting by Jamie Freed in Sydney; Editing by Tom Hogue and Gerry Doyle)