[Hong Kong Airlines Crisis] If Hong Kong Airlines is seized, there is still a chance that it will be granted a short-term license for not more than one year

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Written by: Chen Jingqi

2019-12-03 16:38

Hong Kong Airlines has repeatedly been in financial distress. The Air Transport Licensing Authority yesterday (2nd) urged Hong Kong Airlines to improve its financial situation as required within or before the deadline. Otherwise, it will take further actions, including revoking or temporarily revoking the license. The authorities will ) Or announced before.

According to the Air Transport (Air Services Licence) Regulations, if Hong Kong Airlines is seized, the licensee can still apply for a short-term licence within one month after the seizure, and the term of the licence is within one year. However, if the holder of Hong Kong Airlines spontaneously winds up, according to the previous Ganquan Airlines example, when the licensee enters the winding-up process, the license will become invalid.

Hong Kong Airlines was in financial difficulties. It had previously announced that it would reduce its existing flights by about 6%. It will suspend flights in Los Angeles, Tianjin, and Vancouver in February next year. It also announced that it would stop providing in-flight entertainment system services in December. (Profile picture)

Hong Kong Airlines continued to have financial problems. The Air Transport Licensing Authority issued an ultimatum yesterday, demanding that Hong Kong Airlines improve its financial situation before or before the deadline, and added two new conditions, including the need to inject capital and enhance and maintain cash flow, otherwise it will be seized.

The Hong Kong Airlines parent company Hainan Airlines issued an announcement last night, stating that the company's board of directors agreed to take China Development Bank as the lead bank and agent, and cooperated with China Exim Bank, Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications The China Postal Savings Bank is a syndicate of initial lenders and signs a loan contract. The company applies for a loan of 4 billion yuan (approximately HK $ 4.45 billion) from the syndicate. The eight banks in the syndicate will each provide 500 million yuan.

The loan will be used for operating expenses such as aviation oil, aviation materials, take-off and landing fees, staff salaries, and aircraft rental of HNA Holdings and its affiliated airlines.

According to the Air Transport (Air Services Licence) Regulations, it is mentioned that if the Licensing Authority revokes a license, the licensee can apply for a short-term license within one month after the license is revoked, and if the holder has sufficient financial resources to maintain operations The Licensing Authority may grant short-term licenses not exceeding one year. However, the Licensing Authority may impose any suitable conditions on short-term licences, such as conditions or restrictions relating to sales, carriage, aircraft operations or airline routes.

In other words, if Hong Kong Airlines is seized on or before this Saturday, the Hong Kong Airlines licensee can still apply to the authorities for a short-term license for no more than one year to continue operations.

Ganquan Airlines closed down in 2008. (Dammit / Wikipedia)

According to the information, Ganquan Airlines, the first low-cost carrier in Hong Kong, set sail in October 2006, but it opened for a year and a half and announced its winding-up in 2008. At that time when Ganquan Airlines entered the liquidation process, the Licensing Bureau immediately announced that the 13 air transport licenses issued by Ganquan Airlines were invalid. It is understood that at that time Ganquan Airlines lost about 1 billion yuan.

According to the Regulations, when the licensee is wound up spontaneously, the Licensing Authority can also take the initiative to revoke, temporarily revoke the license, or impose new conditions on the license or modify the existing conditions.

Hong Kong Airlines issued a statement yesterday, stressing that all operations are normal. "Hong Kong 01" asks Hong Kong Airlines how many tickets have been sold yet to be answered.

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