Troubled Hong Kong Airlines (HKA) revealed on Monday that it was reviewing its entire route network and had not ruled out axing all long-haul flights.
The carrier, backed by mainland Chinese conglomerate HNA Group, has been beset by a raft of financial, legal and shareholder challenges for months.
Ricky Chong Wai-ki, director of corporate governance and development, said HKA was reviewing its network of destinations and aircraft delivery plans, though that was at an early stage and there was no clear time frame.
The loss-making airline’s ambitious plans to take on hometown rival Cathay Pacific Airways have fallen into disarray and it has steadily withdrawn from intercontinental services. Flights to the United States and Canada remain but services have been reduced.
“For North American flights, even airlines like Cathay face a lot of pressure so we keep reviewing. Our North American flights will be our short-term focus that we need to consolidate,” Chong said, having not ruled out a complete cut of long-haul flights.
Cathay last week warned of a revenue slowdown because of intense competition on long-haul routes. It also said airfares were under pressure as a result.
Chong – attending an HKA marketing event at which the carrier showed off amenity kits for premium passengers designed by local artists and with a “Hong Kong spirit” theme reflecting culture, people, places and food – said the review was more about the economic environment airlines faced, rather than the company’s financial situation.
“We can’t simply cut long-haul flights without touching the regional short-haul flights,” he said.
HKA, the city’s third-largest airline, said it was reviewing plans to lease up to four Airbus A320 planes to be delivered by the end of the year, although it was unclear if the aircraft would be new or second-hand ones from HNA, a major shareholder. A major aircraft leasing firm is suing HKA for falling behind on payments.
The airline’s corporate holding company and directors are subject to lawsuits which, among other things, are seeking to determine who legally controls the carrier, amid a dispute between factions of groups tied to HNA.
On top of the boardroom drama and financial problems, the airline has tried to cut costs including pilot numbers and reducing the number of widebody jets. The carrier also could not afford to take delivery of four new Airbus widebody planes. It has also seen a high turnover of directors and top managers.
In 2018 the airline carried 7.6 million passengers, a number it was unlikely to match this year with fewer aircraft flying. Chong said the company’s ambition was to better that target in the coming years, though he conceded it was unlikely in 2019. Bookings and passenger numbers were “holding up”, the airline said.
Meanwhile, HKA was continuing to cut employee numbers.
Internal data up to Saturday showed cabin crew numbers since January had fallen by 173, to 1,753.
The number of pilots fell by just 16, to 615, in the same period, despite HKA trying to offload them to other airlines. At the company’s headquarters, it employed 710 staff, some 84 fewer.
HKA is also under intense scrutiny from the airline licensing regulator, which has issued repeated statements calling for the carrier to get its financial situation in order. So far, no fresh meetings have been scheduled between the airline and the authorities, Chong said.
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