This morning Hong Kong Airlines announced they will eliminating 400 jobs given weak travel demand because of the coronavirus outbreak, adding to financial woes of Hong Kong’s second-largest carrier according to SCMP.
Hong Kong Airlines has requested staff take a minimum of two weeks unpaid leave per month, or switch to working three days a week between Feb. 17 and June 30 which is very similar to the strategy their larger rival, Cathay Pacific, requested a few days ago.
Hong Kong Airlines’ US Route Cuts
Hong Kong Airlines has been battling financial woes for some time now.
The airline is owned by struggling HNA Group, which has largely been trying to sell off assets.
In July 2019, it was announced that Hong Kong Airlines would be ending flights to San Francisco as of October 4, 2019. Then the airline announced that its remaining US route, from Hong Kong to Los Angeles, was being cut as of February 8, 2020.
Additionally, in December 2019, the airline was forced to draw up plans to raise money as it faced the possibility of a license suspension by the city’s air transport regulator.
It’s unfortunate to see what’s happening in Hong Kong.
Hong Kong Airlines, specifically, was already in a terrible financial situation, they have extremely strong competition, and there is overcapacity in their markets.
It’s not surprising to see that they’ve been grappling with a sharp fall in demand (thus financial yields) since the middle of 2019 due to widespread, sometimes violent, anti-government protests in the Chinese-controlled territory. It’s obvious now the coronavirus outbreak is also having a significant impact on the airline too.
A “challenging business environment” is the only way to describe their situation.
Let’s file this in the ‘developing stories’ folder too.
What do you make of these latest developments with the Hong Kong-based airlines?