ATLA's follow-up action on cancellation of flights by Hong Kong Express Airways Limited and decision on its licence renewal application


Hong Kong (HKSAR) - The following is issued on behalf of the Air Transport Licensing Authority:
      
     Following the large-scale cancellation of flights by Hong Kong Express Airways Limited (HKE) during the Golden Week in October 2017, the Air Transport Licensing Authority (ATLA) requested HKE to submit a detailed report on the incident. HKE submitted to ATLA a report on October 6 and, upon ATLA's request, furnished supplementary information regarding the incident on October 20. 
      
     In its report and supplementary information, HKE recognised that the incident revealed a range of problems with its management and corporate governance viz (a) human resource planning and management failure; (b) inadequate enterprise risk management; and (c) company leadership deficiencies. HKE reported to ATLA a series of targeted remedial actions taken or to be taken to enhance its operation and corporate governance efficiency.

Details of HKE's action plan are in the Annex.
      
     ATLA notes that the Civil Aviation Department (CAD) has accepted HKE's report, submitted to the department, which includes a detailed action plan to address the issues revealed by the incident, and that the CAD would closely monitor HKE's implementation of its action plan based on a set of concrete key performance indicators.
      
     ATLA considers the actions taken or being planned by HKE reasonable and constructive in addressing the management and corporate governance issues identified, and is of the view that HKE is moving in the right direction towards re-establishing its ability to maintain service stability and reliability on a sustained basis.   
      
     Separately, HKE's current licence will expire after November 11, 2017. After careful consideration of HKE's application for licence renewal, including the detailed action plan to address issues revealed by the incident, and having regard to the advice of the CAD and ATLA's independent financial consultant, ATLA is satisfied that HKE meets the statutory licence renewal requirements. On the other hand, as HKE's business consolidation process arising from the incident is still at its beginning, ATLA considers it prudent to closely monitor the long-term effectiveness of HKE's reform in enabling it to fulfil the licensing requirements on a sustained basis. 
      
     Approval has therefore been given by ATLA for HKE to renew its licence for five years starting from November 12, 2017, with specific conditions for HKE to submit progress reports on the implementation of the action plan and quarterly financial reports to ATLA, among other licensing conditions. 
      
     ATLA will continue to monitor compliance of licence holders in accordance with the relevant regulations.



Published on: 2017-11-09

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