Hong Kong Airlines Ltd (HKA, 香港航空) is delaying paying salaries as protests have “severely affected” the territory’s third-biggest carrier, whose finances were already under strain before anti-government demonstrations flared in June.
Only cabin crew and overseas employees are to receive their wages for this month on time, while all other Hong Kong-based workers are to be paid on Friday next week, the closely held airline said in an e-mail yesterday.
It said revenue dipped significantly this month — a low travel season — and impacted the monthly payroll.
Authorities have been concerned about Hong Kong Airlines for months, regularly requesting updates on its financial situation.
Representatives of the Hong Kong Transport and Housing Bureau and the Civil Aviation Department met with the airline’s management on Nov. 1 and demanded that the company work to improve its financial position.
The Hong Kong Air Transport Licensing Authority (ATLA), which has the power to revoke flying rights, has also expressed concern about the airline.
“ATLA is of the view that HKA’s financial situation has shown no sign of improvement,” the licensing body said last month, warning that it would “consider taking appropriate action” if no progress is made.
Months of anti-government protests have compounded the airline’s woes, weighing heavily on passenger traffic, while Hong Kong’s economy, already under pressure from a US-China trade dispute, is in recession as tourist numbers plummet.
The unrest has disrupted transport networks and temporarily paralyzed the airport in August, prompting Hong Kong Airlines at the time to say it would adjust services.
“Hong Kong Airlines was probably hit the hardest by the social unrest among the four carriers in Hong Kong,” said Morningstar Inc analyst Ivan Su, adding that the airline has high exposure to mainland routes and is less able to offset a decline in travelers with revenue from international flights.
“Still, it is a surprise to see that the company even struggles to pay staff,” Su said.
Hong Kong Airlines cut some operations earlier this month and plans to cancel Los Angeles-bound flights from February.
Other airlines have also been affected by the unrest.
Cathay Pacific Airways Ltd (國泰航空) is one of the most high-profile business casualties, issuing profit warnings and coming under fire from the Chinese government, as well as the protesters.
Cathay Pacific shares have slumped about 25 percent from an April peak.
“This one-off salary arrangement does not impact our daily operation,” Hong Kong Airlines said. “Our staff remains professional, and are committed to delivering a safe and smooth service to all our customers.”
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