Seven Hong Kong Airlines planes impounded by authority over failed payments

Hong Kong, ChinaUpdated: Dec 17, 2019, 05:22 PM IST

File photo: Hong Kong Airlines.  Photograph:(AFP)

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The Airport Authority announced the seized planes under an ordinance that addresses overdue charges

Cash-strapped carrier Hong Kong Airlines has had seven idle planes impounded at the city's airport after it failed to make payments, authorities said Tuesday, with the firm hit by a plunge in tourist numbers caused by long-running protests.

The Airport Authority announced the seized planes under an ordinance that addresses overdue charges.

"The Airport Authority understands that the detained aircraft have not been operated for passenger service in recent months," a spokesman said.

The rule allows the city's air regulators to impound planes for non-payment of charges and that aircraft can be sold after 60 days if the account is not settled.

Hong Kong Airlines, which has a fleet of 39 planes, said the impounded aircraft were not currently operating passenger routes.

"Our operation remains normal," the carrier said in a statement.

The seizures will deepen concerns over the health of Hong Kong Airlines. The firm is owned by the struggling Chinese conglomerate HNA Group, which has been looking to lower its debt burden.

The airline has been hammered by a sharp drop-off in tourists to Hong Kong as the city convulses from six months of violent pro-democracy protests.

Earlier this month, regulators threatened to suspend its licence unless it found new cash revenues after the company announced it was delaying some salary payments to staff.

The carrier found a last-minute injection of funds, earning a reprieve.

Visitor arrivals have tanked during the protests with passengers from the Chinese mainland plummeting, hammering retail sales and helping tip the city into recession.

Hong Kong airline Cathay Pacific on Tuesday announced it carried just under 2,624,000 passengers last month a drop of nine percent in November last year.

Cathay Pacific was criticised by Chinese state media and authorities earlier this year because some of its 27,000 employees took part in or were sympathetic to anti-government demonstrations in Hong Kong.