Financial Troubles Mount For Hong Kong Airlines

2019 has been a difficult year for a number of airlines. Hong Kong Airlines is one of them. The recent reduction in tourist numbers coupled with intense competition from Cathay Pacific has put the carrier’s ambitions on ice as survival is the first goal for the airline. Let’s take a look at Hong Kong Airlines’ troubles.

Hong Kong Airlines
Hong Kong Airlines has faced a series of troubles. Photo: Airbus

Recent unrest in Hong Kong

Hong Kong Airlines, most recently, has seen declining numbers of travelers as unrest in Hong Kong deters people from traveling. Although Hong Kong Airlines was not the only airline to receive negative effects as a result of this, Hong Kong Airlines was hit fairly hard because, unlike Cathay Pacific, the airline does not have a strong network for connecting passengers.

Hong Kong Airlines
Hong Kong Airlines does not have a strong connecting network. Photo: Chung ChengYen via Flickr

The end of long-haul routes

Hong Kong Airlines recently announced the airline would be ending all long-haul services. Long-haul routes can either be incredibly profitable for an airline, or they can be a huge loss-maker. For Hong Kong Airlines, it seems loss-maker is where it landed. Ultimately, Hong Kong Airlines relied significantly on origin and destination passengers over connections.

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Hong Kong Airlines
Hong Kong Airlines decided to end all long-haul services due to mounting losses. Photo: Airbus

The end of inflight entertainment on Hong Kong Airlines

In another cost-cutting move, Hong Kong Airlines is making a move towards ending inflight entertainment. These services can come at an immense cost to an airline. And, with the lack of long-haul services, management seemed to deem that this is not as important for Hong Kong Airlines to offer passengers.

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Inflight entertainment on Hong Kong Airlines
Hong Kong Airlines will cut inflight entertainment services from December 1st. Photo: Alan Wilson via Flickr

Moving aircraft into storage and delayed salary payments

An Airbus A350 for Hong Kong Airlines recently entered storage. The airline apparently deemed it costlier to fly the aircraft than to store it. This move would make sense if the airline does not want to continue with long-haul flights and such a large aircraft would be difficult to fill on some competitive short-haul routes.

Hong Kong Airlines A350
Hong Kong Airlines sent an Airbus A350 into storage. Photo: N509FZ via Wikimedia Commons

The airline also moved to delay salary payments for around 1,600 of its staff members. Furthermore, the airline also incentivized foreign pilots to leave the carrier in yet another attempt to reduce costs.

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What does all of this mean?

Hong Kong Airlines is in trouble. This kind of trouble does not come cheap. As of now, the carrier is still flying. However, it is unclear exactly how much more trouble the airline can endure before it finally succumbs to all of these pressure. The success or failure of Hong Kong Airlines could also prove whether or not Hong Kong can sustain two independent airlines given Cathay Pacific’s long-standing dominance.

Hong Kong Airlines A320
It is unclear exactly how much longer Hong Kong Airlines can endure this kind of external pressure. Photo: Masahiro TAKAGI via Flickr

What do you make of the situation at Hong Kong Airlines? Let us know in the comments!

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Phil

Virgin Australia should take advantage and buy some of those stored a350s to use in their fleet instead. It would be a low price surely!

Kin Chang

Sell off and close down any balance invest in other countries that are growing, it might take 20 years to recover as the rioters has taken 3/4 of local council elections and this are the people who have no experienced to run the City. Hongkong will never be the same again.