Low-cost carrier Hong Kong Airlines was allowed to continue flying after the city's authorities decided Saturday not to punish it for delaying salary payments and ongoing financial problems.
The international finance hub has seen six months of protests which has dealt a massive blow to the tourism sector and airline operators.
"The Civil Aviation Department has been satisfied that Hong Kong Airlines is able to continue to operate properly and safely," a spokesman from the Hong Kong Civil Aviation Department said on Saturday.
The city's Air Transport Licensing Authority (ATLA) said on the same day that the airline has met the conditions for raising and maintaining its cash level.
The authority added that it will continue to monitor the carrier's operation closely.
In late November, the carrier said its business was "severely affected" by the social unrest in the city and a sustained weak travel demand, which also impacted its payroll.
The licensing authority later required the airline to raise a significant amount of funds with a deadline in order to prevent its financial situation from deteriorating and to protect public interests.
Hong Kong Airlines is owned by struggling Chinese conglomerate HNA Group, which has been looking to lower its debt burden.
Earlier this year, it unloaded another budget carrier -- HK Express -- to rival Cathay Pacific and it also cut some operations.
On Wednesday, in a letter to staff and colleagues, the carrier's chairman Hou Wei said "an initial cash injection plan has been drawn up."
Although the amount of cash was not disclosed, the chairman said the company would pay outstanding salaries to staff on Thursday and the airline's services will gradually return to normal as soon as the funds arrive.
The tourism industry in Hong Kong has been battered by nearly six months of protests that have become increasingly violent, with visitor arrivals falling by half.
The crisis comes as the economy was already feeling pressure from the China-US trade war.
Police to take both 'hard' and 'soft' approaches - commissioner
The Hong Kong police will use both "hard" and "soft" approaches when dealing with protests, Hong Kong's police commissioner Chris Tang told reporters in Beijing on Saturday.
The police chief spoke ahead of a potentially large pro-democracy demonstration on Sunday and following nearly six months of sometimes violent protests in Hong Kong, sparked by a now-withdrawn bill allowing extradition to Mainland China.
Tang said the police will take a "humanistic" approach to minor incidents but warned of resolute measures against more violent actions, and added that he hopes the march will be peaceful.
Hong Kong, a major financial hub, had enjoyed relative calm for the past few weeks since local elections late last month delivered an overwhelming victory to pro-democracy candidates.
Tang was appointed to his position in November. He was in Beijing for a "courtesy visit" to meet mainland officials, the Hong Kong police said in a short statement on Thursday.
He said he met with Zhang Xiaoming, the head of the Hong Kong and Macau Affairs Office , and Zhao Kezhi, China's minister of public security.
The protesters are angry at what they see as Chinese meddling in the freedoms promised to the former British colony when it returned to Chinese rule in 1997.
China denies interfering, says it is committed to the "one country, two systems" formula put in place at that time and has blamed foreign forces for fomenting unrest.
Earlier on Saturday Tang observed a flag-raising ceremony in Tiananmen Square, according to a video footage carried by Hong Kong broadcaster Cable TV.
"I am very excited to see the country's flag fly and to feel the country's greatness," he told reporters.
"I would like to thank... President Xi Jinping (for his) unwavering support of the Hong Kong police strictly enforcing the law."