Court approves Hong Kong Airlines’ HK$49b debt restructuring

HONG Kong’s High Court approved Hong Kong Airlines’ HK$49 billion (S$8.5 billion) debt restructuring plan, boosting the carrier’s chance of survival after years of financial turmoil.

At a hearing on Wednesday (Dec 14), justice Jonathan Harris said the court was sanctioning a so-called scheme of arrangements for Hong Kong Airlines. Counsel for the carrier, which is backed by bankrupt Chinese conglomerate HNA Group, said there was no opposition to the plan. A court in England signed off on a parallel proposal last week.

Hong Kong Airlines plans to jettison 33 aircraft from its 53-strong fleet, while HNA Aviation will oversee the issuance of new shares to an investor to raise about HK$3 billion for the airline.

The carrier was struggling to repay debt even before the Covid crisis, when anti-government protests in 2019 kept visitors away from Hong Kong. Several of its aircraft were seized after a failure to make payments. The airline has scaled back operations, having flown to 34 destinations prior to the pandemic.

The court approval is timely as the process of renewing Hong Kong Airlines’ transport licence is due to begin this month. BLOOMBERG