Hong Kong Air Pays Team Cignus $2 Million in Plane Lease Dispute

Hong Kong Airlines Ltd., part of the city’s second-largest carrier group, said it paid $2 million it owed Team Cignus Ltd. and resolved a dispute over an aircraft leasing contract.

Team Cignus agreed to accept the payment and will not pursue legal action in the matter, Hong Kong Airlines President Yang Jiang Hong said today in a phone interview.

Team Cignus filed a petition on Dec. 6 to the Hong Kong High Court seeking to liquidate Hong Kong Air to recover payment for an airplane lease, according to a court cause list, which didn’t provide details. Team Cignus is an Ireland-registered unit of Tokyo-based NEC Capital Solutions Ltd. (8793)

Hong Kong Air had subleased an aircraft from affiliate Hainan Airlines Co. (600221), which is part-owned by its parent HNA Group. Team Cignus had leased the aircraft to Hainan Airlines.

NEC Capital Solutions didn’t immediately respond to an e- mail seeking comment.

Hong Kong Air, which is part-owned by the government of southern China’s Hainan province, has said it expects to break even or post a small profit this year. Sales in 2010 may rise by 30 percent to 40 percent, according to the airline.

Hong Kong Air and affiliate Hong Kong Express Airways Ltd. operate a combined 17 aircraft, the carrier said on its website.

To contact the reporter on this story: Wing-Gar Cheng in Hong Kong at wgcheng@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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