Hong Kong Airlines in talks with Air China

Hong Kong Airlines has turned to Air China and other parties for a strategic lifeline to reverse its financial woes, amid an impasse with a consortium of white knights after nearly nine months of fruitless negotiations, said three sources familiar with the matter. Air China is among the parties in talks to begin due diligence on Hong Kong Airlines, the sources said. An earlier takeover bid by Citic Group, Wuxi Communications Industry Group and the family of Hong Kong’s former chief secretary Henry Tang Ying-yen failed to make headway because of a disagreement over pricing, the sources said. “Hong Kong Airlines is here to stay and committed to sustaining our long-term growth,” the airline said, adding that as a private company, it does not disclose its financial activities, or comment on rumours and speculation. “We are always open to strong strategic investors.” The emergence of several new white knights is the latest twist in the story of Hong Kong Airlines’ journey back to financial health, as the stricken carrier had to lay off 10% of its staff and put its ground crew on a three-day work week to cut cost. The airline, which flies passengers and cargo to 48 destinations, has been operating on the brink of collapse for months.<br/>