Hong Kong Airlines (HKA) has vowed to get its finances back in shape and “drive consolidation” within the company, after it escaped further sanction from the territory’s authorities. On 7 December, Hong Kong’s Air Transport Licensing Authority (ATLA) said it was satisfied the beleaguered carrier had met the new licensing requirements for its continued operations. ATLA had earlier instructed the carrier to ensure a satisfactory cash injection and to raise and maintain its cash levels to a level stipulated by the regulator. If it failed to do, it could face being shut down. After its latest round of meetings with the carrier, ATLA says it considers the airline to have met the requirement for cash levels and acknowledges its pledge that this will be maintained. But it adds that it will still be monitoring HKA’s finances closely, and that the airline still needs to submit further details regarding its compliance with the conditions attached to its licence. The carrier says in a statement responding to the authorities’ decision that it will comply with these requirements “as always”. HKA was handed a financial lifeline earlier in the week, in the form of an urgently-drawn-up cash injection plan. No details of how much would go into the carrier, or where the money came from, have been disclosed so far. “Funding for operation will be injected into Hong Kong Airlines by phases,” HKA says in its latest statement. “Moving forward, we will continue to drive consolidation and strengthen our internal structure to operate more efficiently and improve our revenue,” the carrier adds. HKA faced an uncertain future on 2 December, after Hong Kong's authorities, including ATLA and the Civil Aviation Department, issued an ultimatum: to turn around its dire financial situation, or face being wound up by 7 December. The carrier had been plagued by a slew of financial troubles, which led to massive network cuts and unpaid salaries. HKA has already exited the North American market, and is cutting down on frequencies to other Asian points, stating that it will be focusing on "priority routes".

Source: FlightGlobal

South African Airways’ (SAA) board will place the national carrier under business rescue, a significant shift in attitude from earlier statements by the government that it remains open for business. Local media reports indicate that president Cyril Ramaphosa told ministers, deputy ministers and the cabinet secretary in an unofficially circulated letter that SAA will have to go into voluntary business rescue. “This is the only viable route open to the government to avoid an uncontrolled implosion of the national airline,” Ramphosa's letter reads. Meanwhile, the country's cabinet secretary Cassius Lubisi was also quoted as saying: “The voluntary business rescue approach will also prevent liquidation applications by any of SAA’s creditors, which would land the airline in an even worse position.” The decision has not been made public but the department of public enterprises is expected to make an announcement soon. Under Chapter 6 of South Africa’s Companies Act, companies in financial distress may be appointed a business rescue practitioner to manage and restructure the company. The aim is to increase its chances of survival or secure a better return for creditors in the event of liquidation, while offering the company some legal protection during the restructuring process. SAA has received multiple cash injections from the state coffers, widely reported as R57 billion ($3.9 billion) since 1994. Just days ago, the same department said the loss-making airline will undergo extensive restructuring, having run out of alternative strategies. The last straw appears to be strikes in recent weeks, which caused “immense danger” to the carrier’s reputation and operations, and contributed to a deterioration in its financial position, the department added. "SAA is determined to remain open for business," it said then. "Management is also committed to ensure financial sustainability going forward." Cirium fleets data shows that the carrier has 45 aircraft in its in-service fleet, comprising seven Airbus A319s, 10 A320s, 11 A330s, 14 A340s, one A350, and two Boeing 737s. It has six other aircraft in storage – three aged A340s, and three A350s with an average age of less than one year old.

Source: FlightGlobal

Indonesia has called for the dismissal of national airline Garuda Indonesia’s chief executive for allegedly smuggling items on an Airbus A330-900 fresh off the production line. Speaking at a press conference on 5 December, the minister for state-owned enterprises Erick Thohir ordered the dismissal of Garuda Indonesia's chief executive Ari Askhara, over an alleged attempt to smuggle a motorcycle into the country via the delivery of its first Airbus A330-900 in November. Thohir did not spell out Askhara's name but specified that the individual was the chief executive of Garuda, initials "AA". He explains that he received a letter from its board of commissioners, as well as a report from Garuda's audit committee, whose report indicated that there was "additional testimony" to support claims that the motorcycle belongs to "AA." "The [financial] transfer process was made in Jakarta to the personal [bank] account of Garuda's finance manager in Amsterdam. Mr "IJ" had assisted in the shipping and its processes, and in other [matters] too." Thohir did not specify who "IJ" was or what his role was in the carrier. He indicates that there will be further investigations, and the smuggling attempt is likely to lead to a civil and criminal case, as it "caused losses to the country." Despite his order for Askhara's dismissal, Thohir stresses that the dismissal will be done "in a procedural manner," as the carrier is listed on the Indonesia Stock Exchange. This means that the dismissal is likely to be tabled at an extraordinary shareholder's meeting, and Cirium data shows that Jakarta owns a 60.5% stake in Garuda. Garuda could not be reached for comments on Askhara's dismissal. The order for Askhara's dismissal comes after the head of public affairs at Indonesia's customs and excise directorate general, Deni Surjantoro, was quoted in a 2 December CNBC Indonesia report as saying that when Garuda's first A330-900 arrived in Jakarta on 17 November after a ferry flight from Toulouse, 18 boxes were stored on the aircraft. Out of the 18 boxes, 15 contained used parts of a Harley Davidson motorbike, while the remaining three contained two brand new Brompton bicycles. Garuda explained in a 3 December press release that the cargo and personal belongings transported by the A330neo was declared to the Indonesian customs authorities and was cleared by its French counterparts prior to departing France. No issues were raised during the Indonesian custom's inspection of the cockpit and passenger cabin, but motorcycle spare parts were later found during a baggage inspection. The airline goes on to state that the spare parts were reported to customs officers for processing, and were intended for the personal use by one of its employees which it did not identify.

Source: FlightGlobal