China to Take Over Hainan Airlines
China’s government plans to take over HNA Group Co and sell off its airline assets, as the coronavirus outbreak has hit the Chinese conglomerate’s ability to meet financial obligations. The news was reported by Bloomberg today, citing people familiar with the matter.
HNA directly controls or holds stakes in a number of local carriers, including its flagship Hainan Airlines which is by far the best airlines in mainland China. In fact Hainan Airlines won the awards for best airline in China, best airline staff in China, and the world’s best business-class amenities in 2019.
HNA Group was once one of China’s most aggressive deal making firms, spending $50 billion to build an empire that once spread from Deutsche Bank to Hilton Worldwide. But the company has been facing cash flow shortages since last year. Then in recent weeks it has come under pressure from the new coronavirus outbreak in China which has forced airlines to cancel thousands of flights. Hainan Airlines tried to cut losses by putting foreign pilots on unpaid leave. Hong Kong Airlines, also part-owned by HNA, said on Friday that it will cut 400 jobs.
It is not clear yet what will happen with scheduled Hainan Airlnes flights, but if you have already booked you should contact the airline or follow closely on future developments.