Hong Kong Airlines issued an extraordinary press release on Saturday threatening to sue anyone who spreads rumours about the carrier going bankrupt. The statement follows weeks of speculation about the fate of the airline and its parent company, the privately owned Chinese conglomerate HNA Group. The statement comes days after an insurance broker changed a travel policy so that it would not pay out should the airline go bust.
“We deplore the untrue and groundless speculations about Hong Kong Airlines ceasing operation and applying for liquidation,” the statement read. It continued: “We reserve the right to take legal action against those who deliberately create these rumours.”
“The company has been and is continuing to operate as normal. We remain committed to offering our best service to customers who have chosen to support and fly with us.”
Over the last few months, speculation has mounted about the financial stability of the HNA Group which owns or is affiliated with a number of high profile Chinese airlines include Hainan Airlines, Beijing Capital Airlines and HK Express.
In July, it was rumoured that European aircraft manufacturer Airbus was refusing to hand over brand new and ready to be delivered A330 aircraft for the HNA Group. Sources said an impasse had been reached over financing for the aircraft which were valued at over $1 billion USD.
Those rumours escalated after journalists saw the jets, painted in the distinctive red and gold liveries of HNA airlines, stacking up at the Airbus delivery centre in Toulouse. The dispute over payment was only resolved in late December, although it’s believed that HNA has been forced to sell off a number of investments in order to fund the aircraft deliveries.
HNA Group is believed to have one of the biggest debt piles in China – currently valued at around $79 billion USD. It sold off more than $17 billion in assets last year, including its holdings in Hilton Hotels and has reduced its stake in Urumqi Airlines. There is also talk of it selling its stake in Chinese low-cost airline Lucky Air.
There were more concerns over the future of Hong Kong Airlines after a recent and unexpected management shakeup at the company. In late December, the airline said it would not publicly discuss its financial performance but that it was business as usual despite losing its chief financial officer (without a successor so far announced) and chairman of the board.
According to the South China Morning Post, Hong Kong’s Air Transport Licensing Authority recently ordered the airline to “explain” its current financial situation.
Hong Kong Airlines currently operates a fleet of 38 passenger aircraft to 36 destinations with a workforce of around 3,900 staff. In a recent statement, the airline said it expected to beat its revenue forecast for 2018.