HONG KONG (REUTERS, BLOOMBERG) - A Hong Kong air transport regulator said on Saturday (Dec 7) that it has decided against suspending Hong Kong Airlines' licence, the city's second-largest airline.

The airline said on Wednesday it had drafted an "initial cash injection plan" that would allow it to make overdue salary payments on Thursday. It did not provide details of the source of the funding.

Air Transport Licensing Authority (ATLA) said in a statement on Saturday that the cash injection plans proved satisfactory, adding that it will continue to closely monitor the firm's operations.

"ATLA has given careful consideration to factors including public interests and the policy direction of maintaining Hong Kong as an international aviation hub," said a spokesman at the authority.

The decision allows the airline to keep flying and avoid stranding passengers the way Thomas Cook Group Plc did with more than 150,000 tourists when it collapsed in late September.

Still, the carrier continues to face headwinds, not least from the anti-Beijing protests that have severely impacted its business as travellers steer clear of recession-hit Hong Kong.

The carrier, part-owned by cash-strapped Chinese conglomerate HNA Group, was told on Monday that it needed to shore up its financial position by Dec 7 or risk the suspension or loss of its licence.