Hong Kong Airlines bosses have been given five days to save the company, putting 3,500 jobs at risk just weeks before Christmas.
The government said on Monday the airline needed to find new cash or last-minute investors; otherwise it will face having its operating licence suspended or even revoked.
In the most serious action taken by the government since the carrier’s financial woes became public, the Air Transport Licensing Authority (ATLA) concluded that the finances of Hong Kong’s third-largest airline, backed by the financially troubled HNA Group, had “deteriorated rapidly”, preventing it from meeting the minimum requirements under its permit.
Pressure will be placed on the airline’s controlling shareholder, HNA, to finally invest money, something which sources said it had not done for a considerable period of time, for lack of cash.
Failure to raise new capital would probably lead to the airline’s closure, which would make it the second local carrier to go out of business, after the 2008 collapse of Oasis Hong Kong.