Ireland firm files petition to wind up financially stricken HK Airlines

Irish firms Stellar Aircraft Leasing has filed a petition to the Hong Kong High Court to have Hong Kong Airlines liquidated due to outstanding debt. The hearing has been scheduled on 11 May and Hong Kong Airlines has been listed as the respondent on the writ, said media reports. The move comes with the aviation industry being heavily impacted, and the Hong Kong-based airlines having implemented measures to reduce expenses to survive.

In June 2021, the financially-beleaguered Hong Kong Airlines confirmed another round of job cuts as nearly two-thirds of its employees had been made redundant or required to take a significant pay cut to keep their jobs. The HNA Group-owned airlines made an official announcement where it said some 700 Hong Kong-based and overseas employees were made redundant commencing in late June. Affected employees were compensated according to their conditions of service and in compliance with local labour laws. Senior management received a pay cut as high as 36%, up from the current 15%, between June and December this year, depending on job grade. The South China Morning Post reported that a new pilot contract was also introduced as their basic pay will be cut by 20%, while the guarantee on the number of paid hours per month was also removed, in addition to the extended unpaid leave. According to HK01, the airline decided to keep only about 100 flight attendants and the majority of them are flight pursers and senior pursers.

Asked about how the marketing department of the airline will be affected, Hong Kong Airlines did not answer the question. The company said, "Hong Kong Airlines is in a critical survival mode. To secure our future, it is imperative for us to transform into a leaner and more efficient organsation now to ensure that we can continue to operate sustainably in the challenging years ahead."

Recently, Hong Kong Airlines' competitor Cathay Pacific reported HK$5.5 billion (US$703 million) in losses in 2021. Its services were heavily impacted by strict travel curbs related to the pandemic.

Chairman Patrick Healy said, "Comparing 2021 with 2020 as a whole, the operating performance in 2021 was generally weaker due in large part to the first two months of 2020 being relatively strong ahead of the full impact of COVID-19. We remained focused on effective cash and cost management. Though we are still facing many challenges, we have the utmost confidence in the long-term future of Cathay Pacific."

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