Insurer drops collapse cover for travelers with HNA’s Hong Kong Airlines By Reuters

By Jennifer Hughes and Sumeet Chatterjee

HONG KONG (Reuters) – A Hong Kong insurance coverage supplier is to cease providing cover in opposition to the potential for HNA-controled Hong Kong Airlines folding, based on a discover issued by the insurer to its brokers and seen by Reuters.

Blue Cross Asia-Pacific Insurance Ltd, owned by Bank of East Asia (HK:), stated within the discover that it could cease the availability for prospects as of Monday.

The notice, first reported by the South China Morning Post, stated the profit merchandise of “Special Allowance – Winding-up of Airline” wouldn’t apply to single-trip journey insurance coverage issued on or after Jan. 7 for travelers on Hong Kong Airlines.

It stated the transfer was taken in gentle of “news of Hong Kong Airlines published by media recently”.

Hong Kong Airlines stated in an announcement it didn’t have a enterprise relationship with Blue Cross.

“We are operating as normal and remain committed to offering our best service to customers,” the airline stated. “We are here to stay and remain committed to sustaining our long-term growth.”

HNA didn’t instantly reply to a request for remark.

Blue Cross stated in an announcement to Reuters the choice was “solely made based on commercial considerations”.

Several Hong Kong insurers provide payouts within the occasion of an airline collapse though the cover is just not as widespread worldwide.

Under Blue Cross’s on-line journey insurance coverage provide, coverage holders can declare as much as HK$2,000 ($255) if they’ve paid for a ticket on an airline which publicly pronounces it’s winding up previous to the journey.

Hong Kong Airlines reassured prospects of its monetary soundness final month after a collection of high-level govt departures had sparked hypothesis it was struggling.

The low-cost airline, which operates 38 plane to nearly 40 locations in Asia and North America, is a part of Hainan Airlines (SS:), China’s fourth-largest provider and a part of cash-crunched Chinese conglomerate HNA Group [HNAIRC.UL], which is within the means of promoting a collection of belongings acquired throughout a $50 billion world deal spree.

The group, whose belongings nonetheless embody the biggest single stake in Deutsche Bank (DE:), started its streamlining in 2017 after Beijing cracked down on aggressive abroad deal-making.

HNA’s sale course of is now being overseen by China Development Bank, certainly one of its largest collectors, Reuters reported final month.

In December, financing from CDB was instrumental in Airbus resuming stalled supply of planes to HNA-affiliated airways.

($1 = 7.8300 Hong Kong {dollars})