Hong Kong Airlines Taken To Court Over Non-Payment Of Aircraft

Hong Kong Airlines has been taken to court over the non-payment of aircraft leased from an Irish firm. The South China Morning Post reports that Awas Leasing One LLC is owed $2.9 million by the struggling airline.

Hong Kong Airlines, Unpaid Rent, Lawsuit
Hong Kong Airlines is facing a lawsuit over unpaid aircraft rent. Photo: Getty Images

As 2020 begins, 2019 seems like a year that Hong Kong Airlines would rather forget. Towards the end of the year, the airline has seen some troubles. In fact, the Hong Kong Air Transport Licensing Authority even threatened to revoke the carrier’s air operators certificate. The issue hasn’t been helped by ongoing protests in Hong Kong which have led to a sharp decline in passenger numbers in the latter portion of the year.

A troubled end of the year

The end of the year hasn’t been great for Hong Kong-based carrier Hong Kong Airlines. The airline has been in the headlines a fair bit, and not for the best reasons. The story really kicks off in September, when Hong Kong Airlines announced it was cutting capacity. This was attributed to falling passenger numbers. Towards the end of the month, the airline sent an Airbus A350 to France to enter storage.

At the end of November, Simple Flying reported that 1,600 employees of Hong Kong Airlines were experiencing a delay in receiving their salary. The same day, the airline announced it would close its last long-haul route. This was the route to Vancouver, with last bookings being taken for February 2020.

Hong Kong Airlines
Hong Kong Airlines hasn’t had the best end to 2019. Photo: Airbus

Things escalate

Things began to escalate in December. As financial troubles began to mount for the carrier, it switched off its inflight entertainment system. On Monday the 2nd of December, the Hong Kong Air Transport Licensing Authority gave the airline until the end of the week to prove financial viability. The very next day, the airline’s owners secured a loan for half a billion dollars. Seven of the airline’s aircraft were then seized in mid-December.

What now?

Now, the owners of Hong Kong Airlines’ Aircraft are beginning to fight back. According to the South China Morning Post Alafco, an aircraft leasing company sued the airline over $35M it was owed three weeks ago. Now, Awas Leasing One LLC is joining the action with its own suit. It claims the airline owes it almost $3 million for two Airbus aircraft.

hong-kong-airlines-cuts-capacity
Will 2020 treat Hong Kong Airlines any better? Photo: Airbus

Awas is seeking unpaid rent in addition to interest on the amount. It also claims that Hong Kong Airlines failed to ground the aircraft as requested following notice on the 19th of December.

What do you think the future holds for Hong Kong Airlines? Let us know your thoughts in the comments!

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