Written by: Huang Yongyu
2019-12-02 19:20Last updated: 2019-12-02 19:20
Hong Kong Airlines has repeatedly reported financial difficulties. The Air Transport Licensing Authority said today (2nd) that if Hong Kong Airlines fails to improve its financial situation as required by the deadline, the authorities will take further actions, including "pinning", as soon as this week. The decision will be announced on or before the 6th (7th).
According to the information, in 2006, HNA acquired the original Zhongfu Airlines and changed its name to "Hong Kong Airlines". In the past, Hong Kong Airlines was mainly based on short-distance routes. In recent years, it has continuously expanded its operations, including the development of more long-distance destinations, such as Vancouver, Canada, Los Angeles, and San Francisco. However, in the event of a shareholder fight in 2018, there was a "personnel quake" in the second half of the year. Two thirds of the directors resigned within the six months. At the same time, Hong Kong Airlines' financial difficulties continued, and debts were recovered by various parties, with a total amount of more than 1 billion. This year, Hong Kong Airlines was caught in a crisis of safety and financial difficulties. There were successive accidents of missing parts. Due to financial difficulties, it was necessary to suspend long-distance routes. Some employees had to delay food delivery and suspend the on-board TV entertainment system.
On November 28, 2016, the Chief Executive, Leung Chun Ying, attended the 10th anniversary celebration of Hong Kong Airlines. Pictured Liang Zhenying (fifth from left), Lin Wu (third from left), deputy director of the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region, Hu Jianzhong (fourth from right), deputy commissioner of the Office of the Commissioner of the Ministry of Foreign Affairs in the Hong Kong Special Administrative Region, and Zhang Ye, co-chairman of the Hong Kong Airlines (5th from the right) and Meng Jianqiang (4th from the left), and Professor Zhang Bingliang (2nd from the left), Director of Transport and Housing Bureau, toasted with other honored guests. (Data him)
Port Airlines expanded its territory in 2006
Hong Kong Airlines was formerly known as Zhongfu Airlines, which was established in 2001. In 2006, Xinhua Airlines, a subsidiary of HNA Group, acquired 45% of the shares, and Meng Jianqiang, the director of Xinhua Airlines, officially changed its name to "Hong Kong Airlines". After HNA entered the main business, it continued to expand its territory. Hong Kong Airlines was originally based on short-distance routes, and its early development was smooth sailing. It has been adding waypoints and expanding its service coverage.
In 2016, Hong Kong Airlines celebrated its tenth anniversary and invited Deng Jingcheng, former Commissioner of Police, to serve as Vice Chairman and Executive Director. The anniversary dinner of that year was a star-studded star. Sometimes the Chief Executive Liang Zhenying attended. Deng Jingcheng even predicted that passenger traffic could increase by 18% in 2016, reaching a new high of 6.6 million passengers. He also expressed the expectation of developing more long-distance waypoints and employing more than 1,000 new people. Employees, added to more than 50 passenger aircraft.
In 2017, Hong Kong Airlines opened North American routes, including Vancouver, Canada and Los Angeles, and invited Jackie Chan as the spokesperson. It was also ranked as the "Best Regional Airline in the World" by Skytrax.
Former Commissioner of Police Deng Jingcheng has been the Deputy Chairman of Hong Kong Airlines since 2016, and eventually resigned from the jetty in 2018. (Profile picture / Photo by Huang Yongjun)
Shareholders arguing over the 2018 personnel quake
The development of Hong Kong Airlines is booming, and its parent company, Hainan Airlines, has also made great efforts in the real estate sector in Hong Kong. Since 2016, it has won four sites in Kai Tak for a total of more than 27.2 billion yuan. However, in 2018, HNA repeatedly reported financing problems, continued to sell Hong Kong's assets, and sold all Kai Tak sites. It also caused its Hong Kong Airlines and Hong Kong Express to fall into a financial crisis.
In the second half of 2018, the Hong Kong Airlines Board of Directors and the personnel quake, six of the nine directors resigned within six months, including former Commissioner of Police Deng Jingcheng, core figures of Hong Kong Airlines Meng Jianqiang, Zhong Guosong and others. In addition, CFO Luo Jiaqi and Director of Services Jian Haoxian also left.
A high-level earthquake unveiled the debt crisis of Hong Kong Airlines. At the end of last year, a bond was revealed to fall to "junk level". The yield to maturity was as high as 65%, and the shareholder HNA Group recovered over 850 million Hong Kong dollars of debt arrears and Claim. At the beginning of this year, Hong Kong Airlines was pursued by the two companies for the cost of leasing aircraft, involving a total amount of 150 million, and was later recovered by Macau International Bank. It was accused of borrowing more than 157 million Hong Kong dollars but only 2.03 million. The growing debt crisis has raised questions about whether Port and Airways is still capable of continuing operations.
Hong Kong Airlines shareholders Zhong Guosong and HNA Group have started a battle for the right to speak. One party of Zhong Guosong has stated that they need to thoroughly check the financial information of Hong Kong Airlines. The two parties are more open to the public. At the same time, both parties have announced that they have representatives on the board of directors and chairpersons. The storm finally reached a settlement agreement with Zhong Guosong receiving 100 million yuan in cash, and then no longer held HNA shares.
HNA Group originally held Hong Kong Airlines and Hong Kong Express, and eventually sold Express to Cathay Pacific. (Profile picture / Photo by Zhong Weide)
It has been said that Tang Yingnian took the lead in being a white warrior, but nothing has happened.
The financial distress caused by the HNA crisis has drawn attention to whether White Samurai rescued Hong Kong Airlines, but it was Hong Kong Express, another asset of HNA, that was eventually acquired. Cathay Pacific and HNA signed an acquisition agreement in March this year, and spent 4.93 billion yuan to acquire 100% equity of Hong Kong Express. After the dispute between HNA shareholders, the acquisition was finally completed in July.
As for Hong Kong Airlines, in July, a consortium led by Tang Yingnian, a member of the Standing Committee of the Chinese People's Political Consultative Conference and the former Chief Secretary for Political Affairs, intentionally turned on the light. The South China Morning Post quoted people familiar with the matter in July, saying that CITIC Group companies and the state-owned Wuxi Transportation Industry Group A China-Hong Kong consortium formed with the Tang Yingnian family is negotiating to purchase Hong Kong Airlines. The acquisition includes injecting at least 2 billion yuan of new capital into Hong Kong Airlines, and new investors will also bear some of Hong Kong Airlines' debts. However, the acquisition has not happened so far, the white warrior has not appeared, and the financial difficulties of Hong Kong Airlines have worsened, and they have fallen into a flight safety crisis.
Hong Kong Airlines has made great efforts to actively recruit and expand the territory. (Profile picture / Photo by Lu Yiming)
Missing parts in May
There was another upsurge. In the face of the debt crisis, at the same time in May this year, Hong Kong Airlines broke out a flight parts loss incident. In four days, there were eight flights to Tokyo Narita International Airport. It was found that there were missing parts. A total of 19 parts were involved. The incident even shocked foreign civil aviation management authorities. The Civil Aviation Department of Hong Kong has expressed great concern and will follow up the incident very seriously.
Delays to pay in November for shutting down multiple routes
In addition, since June, the anti-revision demonstration conflict began, and the number of Hong Kong passengers has plummeted. It is also difficult for Hong Kong Airlines to escape. The management team reduced wages by 20% for four consecutive months from September to December, and some employees' wages for November need to be postponed. Since this year, Hong Kong Airlines has ceased to operate routes such as San Francisco in the United States and Auckland in New Zealand. From February next year, it will suspend operations in Los Angeles, Vancouver, Canada, Ho Chi Minh City, Vietnam, and Tianjin, China. In other words, Hong Kong Airlines has no long-distance routes. From December 1, the entertainment system services on all flights will be temporarily suspended.
Hong Kong Airlines has had several accidents with missing parts this year. The picture shows the situation after the crew's safe rework. (Profile picture)
Affected by social movements, dragging food, reducing wages, stopping air routes
In addition, since June, the anti-revision movement has begun, the number of passengers has plummeted, the tourism industry has been the first to suffer, and Hong Kong Airlines has had no escape. The management team reduced wages by 20% for four consecutive months from September to December. Recently, some employees reported that the salary of November should be delayed. In addition, following the announcement last month that three routes including Vancouver, Canada, Ho Chi Minh City, Vietnam, and Tianjin, China will be closed next February, it has recently announced that it will reduce flights by 6%, and will suspend Los Angeles flights from February. Entertainment services will also be suspended on flights. Implement a number of measures to open source and reduce expenditure.
Since June, Hong Kong Airlines implemented a number of measures to increase revenue and reduce expenditures, including delaying the payment of employees' salaries, suspension of routes, and salary cuts by management. (Profile picture / Photo by Huang Yongjun)
Do not improve financial difficulties or card sales before December 7
The Air Transport Licensing Authority has issued multiple statements urging Hong Kong Airlines to resolve its financial difficulties. Today (2nd), it is clear that Hong Kong Airlines must ensure that it can inject funds set by the Licensing Authority or provide other matters to the satisfaction of the Licensing Authority by the deadline or before. Plan, and upgrade and maintain its cash and deemed inventory cash to a reasonable level set by the Licensing Authority, otherwise the license can be revoked or suspended, and the relevant decision will be announced before December 7.
Regarding the requirements of the Licensing Authority, a Hong Kong Airlines spokesperson responded that they are aware of the new conditions imposed by the Licensing Authority on its license today. At present, daily operations are as usual and are actively communicating with shareholders and other stakeholders to meet the latest requirements of the Air Licensing Authority. And will continue to provide professional services to customers.
In 2016, the Hong Kong Airlines Flight Training Center opened, and the stewardess performed martial arts. (Photo / Photo by Liang Pengwei)
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