Hong Kong Airlines in talks with Air China

Hong Kong Airlines Limited 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, the nation’s flag carrier and the biggest international airline, 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 overpricing, the sources said.

“Hong Kong Airlines is here to stay and committed to sustaining our long-term growth,” the airline said in response to a query by South China Morning Post, adding that as a private company, it does not disclose its financial activities, or comment on rumors and speculation. “We are always open to strong strategic investors.”