Dublin-based company sues Hong Kong Airlines over unpaid rent in excess of US$2.9 million

Jasmine Siu

Hong Kong’s third largest airline has been hit with another lawsuit over unpaid rent in excess of US$2.9 million after its near collapse earlier this month.

Hong Kong Airlines was on Monday sued by Awas Leasing One LLC for outstanding rent of US$2.925 million over two Airbus planes as of December 29.

The Dublin-based plaintiff also accused the crisis-hit airline of failing to comply with its grounding notice on December 19, effective the following day.

It is now seeking repayment plus interest, and injunction in respect of the airline’s alleged non-compliance and breach of two leases over the aircraft, signed on April 22, 2016.

Hong Kong Airlines’ financial troubles are far from over as it faces demands to pay creditors. Photo: Winson Wong

The legal action filed in the High Court came three weeks after another company, Alafco Irish Aircraft Leasing Sixteen, sued the airline for allegedly failing to settle a payment of more than US$34.5 million.

The carrier had narrowly avoided going out of business earlier this month, after satisfying the city’s airline licensing authority that it had raised enough cash to carry on.

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The first condition imposed on the airline by the Air Transport Licensing Authority (ATLA) was a requirement to raise substantial capital before deadline. The second was to maintain and improve its cash balances as instructed by the ATLA.

But the company’s financial troubles are far from over as it still faces demands to pay creditors.

Founded in 2006, the carrier is backed by the heavily indebted HNA Group.

The 13-year-old airline currently flies to 32 destinations, mostly in North and Southeast Asia. It is the only local competitor to the dominant Cathay Pacific Group, which has control over three passenger carriers in the territory.

After more than 12 months of warning signs, Hong Kong Airlines’ financial fragility was exposed during the ongoing civil unrest in the city, which has led to fewer travellers and ticket bookings.

This article Dublin-based company sues Hong Kong Airlines over unpaid rent in excess of US$2.9 million first appeared on South China Morning Post

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