Hong Kong Airlines has been allowed by the Hong Kong government to keep its air license. This comes after a cash injection earlier this week.
Hong Kong Airlines gets to keep its license
In a press release, the Civil Aviation Department of Hong Kong announced decided not to take any additional action against Hong Kong Airlines. Hong Kong Airlines will be able to keep its Air Operator’s Certificate, or AOC, for now. However, the agency did not announce that Hong Kong Airlines is out of the clear for good. Instead, the agency announced the following:
Nevertheless, the CAD will continue to closely monitor HKA’s operation and take decisive actions should HKA is found unable to operate in accordance with the Air Navigation (Hong Kong) Order 1995.
Meanwhile, Hong Kong Airlines announced that the airline is committed to sustainable long-term growth. In light of the recent cash injection, Hong Kong Airlines does have some room to breathe. However, the airline also now has to look at a number of different factors.
Hong Kong Airlines and sustainable growth
Sustainable growth can come in many different fashions. Airlines have to walk a fine line when it comes to growth, operations, and financial incentives. Some airlines have burned through a lot of cash, grown a fair bit, and then seen the end of the road, as in the case of WOW Air. Hong Kong Airlines had some impressive growth, however, it appears that this is unsustainable in the long-run.
However, sustainable long-term growth is probably more along the lines of short and medium-haul growth rather than long-haul operations. Long-haul flights are expensive to operate and difficult to start up. Furthermore, long-haul flights generally require some degree of connectivity which Hong Kong Airlines lacked. This is why the airline probably cut all long-haul operations. Then, there is also Hong Kong to consider.
Hong Kong is a difficult market
Cathay Pacific is a dominant force in Hong Kong. The airline is well-known both locally and internationally. And, as a member of the oneworld alliance, Cathay Pacific can offer customers more connections and options than Hong Kong Airlines.
Notoriously, Cathay Pacific relies heavily on connecting passengers. And, while Hong Kong Airlines could theoretically grow its operations to bring in more connecting passengers, the airline would have to offer some incredible advantages over Cathay Pacific either in terms of product or cost.
Hong Kong Airlines is still flying…for now. The airline has to carefully manage this loan and turn things around in order to keep up its operations. Getting a second loan could be incredibly difficult if the airline has nothing to show in terms of improvement. However, this is one positive step forward for the airline. Now, it just remains to be seen what the airline does with it.
What do you think Hong Kong Airlines should do to keep flying? Do you like Hong Kong Airlines? Let us know in the comments!