Airport Authority Hong Kong (AAHK) has shared today that it has seized seven of Hong Kong Airlines‘ aircraft. The group states that this was done to protect its financial interests.
Hong Kong Airlines has been going through great financial difficulties this year. The situation had become so bad that it couldn’t even pay its staff for a while. The South China Morning Post reports that the airline was on the brink of collapse a few weeks ago before it managed to find some funds.
While the airline continues to struggle with its finances, AAHK confirmed that it had invoked section 40 of the Airport Authority Ordinance. This would give it control of the idle planes at Hong Kong International Airport.
The seized planes had been stored and not operated with for three to 11 months. Two of the jets in the fleet are Airbus A350s, registrations B-LGE and B-LGH. These were leased from Kuwaiti-based ALAFC.
The Irish subsidiary of this lessor had previously taken legal action against Hong Kong Airlines for HK$364 million (US$46.7 million) in unpaid rent on its aircraft.
A Hong Kong Airlines spokesperson shared information on how the impoundment will impact its operations. Since the planes hadn’t been used for many months, the impact on its current schedule is minimal.
“Due to network consolidation, some of our aircraft have not been scheduled for operation and are currently suspended from service under the Airport Authority’s arrangement. Our current operation remains normal,” the spokesperson said, as reported by the South China Morning Post.
Additionally, the Civil Aviation Department states that the detention of these airliners protects the monetary interests of both AAHK and the government.
Another price to pay
In addition to its growing debts, the airline has been piling up fees for the way it had been storing these planes. This is because it is charged for every 15 minutes that it parks an aircraft at the airport.
Therefore, according to the report’s calculations, Hong Kong Airlines owes between HK$11 million ($1.4 million) and HK$17.2 million ($2.1 million) in parking fees!
The carrier’s financial difficulties haven’t been helped by the ongoing protests in Hong Kong, which has affected operations in and out of the region this year. With the threat of its license being taken away by the Civil Aviation Department of Hong Kong gone for now, the airline will be hoping for another lifeline to get back on its feet in the new year.
Simple Flying reached out to Hong Kong Airlines for comment on the impoundment of seven of its planes. We will update the article with any further announcements.
Do you think the correct action was taken to seize these planes? Let us know your thoughts in the comment section.