(Reuters) - Hong Kong Airlines said on Wednesday it had drafted an "initial cash injection plan" that would allow it to make overdue salary payments on Thursday as the carrier battles to keep flying.

Hong Kong's Air Transport Licensing Authority (ATLA) said on Monday that it had attached new conditions to the airline's licence, requiring it to raise money and maintain cash levels whose details were not disclosed.

ATLA said if the conditions were not met, a decision on whether to suspend or revoke the licence of airline, partly owned by cash-strapped Chinese conglomerate HNA Group [HNAIRC.UL], would be announced by Dec. 7.

"Following urgent consultations, an initial cash injection plan has been drawn up," Hong Kong Airlines said in a statement on Wednesday. "Outstanding salary to staff will be paid on 5 December 2019 and our services will gradually resume to normal as soon as the funds arrive."

An airline spokesman did not respond immediately to a request for comment on the source of the funds.

Hong Kong Airlines and larger rival Cathay Pacific Airways Ltd <0293.HK> are battling a steep decline in demand as a result of months of anti-government protests in the Asian financial capital.

Hong Kong Airlines was in a precarious financial position even before the unrest. The unlisted company in April told shareholders it had lost HK$3 billion ($383.39 million) in 2018, according to people with knowledge of the matter.

Bank of China Group Insurance said on Tuesday some of its insurance plans would no longer cover bookings on Hong Kong Airlines, according to a statement on its website.

The airline has announced several capacity cuts, including the suspension of flights to Vancouver, Ho Chi Minh City and Tianjin.

Several airlines have collapsed in 2019 because of financial problems, including India's Jet Airways Ltd <JET.NS>, Britain's Thomas Cook and Iceland's WOW.

($1 = 7.8249 Hong Kong dollars)

(Reporting by Jamie Freed in Sydney; additional reporting by Twinnie Siu in Hong Kong. Editing by Gerry Doyle)