HNA Group Continues Aviation Expansion

Aviation investments continue unabated
HNA is now being seen as a possible 49.99 percent shareholder in Servair, which is Air France’s on-board catering unit. The French carrier is quoted as saying that they are in exclusive negotiations with the Hainan-based conglomerate for a speedy handover of almost 50 percent of the catering company.

The discussions seem to have gone so far that Air France is willing to hand over operational control of the unit by HNA once the deal goes through.
Servair has been valued at around €475 million.
If the deal goes through as planned, this will be HNA’s second acquisition in the airline catering sector after their recent takeover of the Swiss caterer Gategroup last month.
That deal is reported to have cost the Chinese group USD1.4 billion.
The Gategroup acquisition still has to be ratified, but once done, along with the Servair holding, HNA and Air France intend to build what they see as the leading catering platform for inflight catering services.

Virgin Australia gives 13% stake to HNA
The Chines group has also set its eyes firmly on ‘down-under’ by pushing ahead to acquire 13 percent of the Virgin Australia Group for an amount of AUD159 million.
The deal still has to be passed by both Australian and Chinese regulatory bodies and once done will allow HNA to have a seat on Virgin’s board of directors.
HNA is reported to have an option to increase their holding up to 19.9 percent.

Virgin and HNA will start looking at direct operations between Australia and China and also cooperate together on passenger code-shares and frequent flyer programs.
It is interesting to note that due to HNA’s shareholding, the shares of other carriers in Virgin Australia will fall considerably.
Air New Zealand from 25.9% to 22.5%, Singapore Airlines from 22.8% to 19.8% and Etihad Airways from 24.2% down to 21%.

HNA on the road to becoming an aviation giant
The HNA group started its career in 1993 and in the just over 20 years since its inception has grown as one of China’s leading aviation, logistics and tourism giants.
It boasts well over 180,000 employees and a 2015 revenue of RMB 190 billion.
It ranks as number four in Chinese aviation and number 99 in the top 500 Chinese enterprises.
It owns around 12 - 13 airlines in China, two of which, Yangtze River Express and former Turkish MyCargo Airlines are all freighter carriers.
In total the HNA Aviation Group has a fleet of more than 820 aircraft with which they serve almost 700 domestic and international routes.

The acquisition of Zurich-based ground handler Swissport, which has a strong worldwide network of airport passenger, ground handling and cargo handling operations, has given HNA a first taste of entering into the international airport handling scene.

John Mc Donagh