| HONG KONG
HONG KONG Aug 3 Hong Kong's aviation regulator
has halted the expansion of Hong Kong Airlines following
complaints about its service standards, raising fresh doubts
about the carrier's orders for Airbus planes worth
billions of dollars.
In an unprecedented move by the Hong Kong Civil Aviation
Department, the authority has frozen the fleet of unlisted Hong
Kong Airlines, controlled by China's HNA Group, to its current
size of 20, at least for now.
The decision has cast renewed doubts over the fate of Hong
Kong Airlines' orders for 10 Airbus A380 worth a combined $3.8
billion. They are due to be delivered from 2015.
The orders already faced uncertainty due to a row between
China and the European Union over airline emissions charges.
The Hong Kong Civil Aviation Department (CAD) said on Friday
it had added a condition to the Air Operator's Certificate (AOC)
issued to Hong Kong Airlines (HKA) that listed all the current
aircraft the airline has in operation.
This meant that Hong Kong Airlines will not be able to
operate any aircraft that is not listed on the certificate
unless the department later rectified the conditions, it said in
an emailed statement.
"It sounds like a very diplomatic way to say that we think
your safety standards are slipping so, until you can show us you
can handle any additional aircraft being added to your fleet, we
would not approve it," said Jeffrey Lowe, general manager of
Asian Sky Group, a Hong Kong-based aviation consultants group.
Partly owned by China's fourth largest airline, Hainan
Airlines Co Ltd, Hong Kong Airlines signed a draft
agreement in 2010 to buy 15 A350 XWB and 10 A330-200 aircraft in
a deal worth $5.7 billion in total.
Based on a previous Airbus statement, Hong Kong Airlines had
placed accumulated orders for 30 A320 to be delivered from 2012.
But Airbus and Hong Kong Airlines declined to disclose the
delivery schedule of planes.
"With a very rapid expansion of aircraft fleet in recent
years, CAD considers that it is time for HKA to catch up with
its current fleet size by consolidating their existing
operations," the aviation department said.
Hong Kong Airlines' cargo unit Hong Kong Express Airways
also ordered six Boeing B777 freighters last year, according to
The cargo carrier, however, operated under a separate AOC,
the equivalent of a driving licence for airlines, and thus will
not be affected, a Hong Kong government spokeswoman said.
The regulator said it had received eight complaints
concerning Hong Kong Airlines' service standards since July but
none of them are related to its safety standards.
Cabin staff members have been asked to clean the planes and
work overtime after Hong Kong Aircraft Engineering Co (HAECO)
stopped maintenance service to Hong Kong Airlines in June due to
an unsettled maintenance bill, local media reports said.
The airline has suffered flight delays, which had been
escalated by recent typhoons in Hong Kong and Taiwan.
Hong Kong Airlines could probably accommodate the new
conditions in the short term, said Credit Suisse analyst Timothy
"However, in 2014 and 2015, HKA has major additions to its
fleet (including Hong Kong's first A380s) and to have its fleet
growth limited by an impaired AOC would have real implications
for aircraft utilisation and the carrying cost of surplus
assets," he added.
Hong Kong Airlines apologised to customers, saying the
recent unstable operations of some of its flights was caused by
the shift of maintenance service to a new provider from HAECO.
The new provider had started recruiting staff, training and
purchasing facilities and that would take time to have an
effect, it said in a statement.