, which has a debt of up to HK$49 billion, has recently ushered in a critical moment. At the pace, its restructuring plan will be heard by the "High Court of England and Wales" on October 25 (next Tuesday). If 75% of creditors agree, it will become a small company to survive and continue to operate through measures such as reducing debt and reducing fleets. Otherwise...
Otherwise, it may be liquidated! In March this year, European leaseholders have submitted an application to the court to rule on the bankruptcy of Hong Kong Airlines to recover the rent.
Photo: Hong Kong Airlines A320 Photo: Pull up the curtains
Hong Kong Airlines admitted in September that it owed the leaser HK$22.5 billion, and also owed banks and other creditors a lot of money, with a total debt of approximately US$6.2 billion. It now has only more than 30 aircraft, and it is not worth the money to sell them all - not to mention that many aircraft are rented.
Hong Kong Airlines plans to reduce the fleet size to 1/3, that is, about a dozen aircraft. In the past, it was estimated that it only retained A320, but now it seems that there may be a few A330; after all, Hong Kong is a hub city, and some routes can support A330-300, such as Osaka.
Picture: Hong Kong Airlines A330-300Photos: Pull the curtains
Hong Kong Airlines' restructuring plan also includes introducing funds and suspending debts. The funds introduced mainly rely on HNA Group . Debt suspension refers to repaying 5% first and “repaying slowly” the rest. But this requires 75% of creditors to agree and court approval. There was news earlier that about 73% of creditors have agreed to this plan.
Last week there was also news that in exchange for more creditors to support restructuring and avoid liquidation, Hong Kong Airlines will pay more advance cash to "secured creditors", increasing from about US$17 million to about US$45 million, an increase of 2.5 percentage points.
Picture: It has only been established for more than ten years. Photo: Pull up the curtains
Some comments said that this may not necessarily increase the support ratio by 2.5 percentage points, which means that 75% of creditors have not yet collected enough support from creditors, and the situation is very critical. However, after the Hong Kong government loosened its epidemic prevention policy, the number of flights increased. Hong Kong Airlines has used A330-300 to Osaka, with a one-way ticket price of up to more than HK$3,000. So this may also mean that income is increasing, and the most dangerous time has passed.
Hong Kong Airlines has a relatively flexible business policy. It is not a cheap airline. It has free luggage and also provides hot meals on important routes. Its price strategy is quite fierce and is very competitive on travel routes. Before the epidemic, many mainland tourists used it to transit through Hong Kong and travel to Japan and Southeast Asia, which was very popular.
Picture: Once brought benefits to Chinese people Photo: Pull up the curtains
But the main market of Hong Kong Airlines is in mainland China. If the mainland's epidemic prevention policies are not relaxed, Hong Kong Airlines will still be able to live in the gap between Cathay Pacific and Hong Kong Express. For example, yesterday, Chengdu and Shanghai were both cancelled again. Relying on local guests alone, Hong Kong Airlines ran around with more than a dozen planes. Does it take until the year of the Monkey and Horse Month to pay off its huge debts? ——It’s even harder than ant tripping the elephant!
Reducing the scale is definitely a "way-to-way solution", but shrinking to more than a dozen will be a "small company". Small companies are carrying billions of dollars in debt, which is rare in the world! Not far from the hearing, will the creditor ask for a liquidation "to get a little, just a little"? Or will you patiently agree to "ank ant trip the elephant"? ——Maybe there will be news at the end of this month.
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