HNA Group - Too many airlines?

8 replies

popsicles

Member since 17 Jun 2018

Total posts 8

This is obviously partially due to wanting to raise lots of capital and Chinese government restrictions, but HNA’s aviation strategy seems a bit ridiculous. They currently own (or partially own) the following airlines:


Hainan Airlines
Tianjin Airlines
Grand China Air
Air Changan
Beijing Capital Airlines
Fuzhou Airlines
Lucky Air
Urumqi Airlines
GX Airlines
Virgin Australia
MyCargo Airlines
Aigle Azur
Comair
Azul
TAP Airlines

Shouldn’t they, at the very least, try to streamline their offering somewhat? Or present a more coherent product to customers?

Traveller14

Member since 17 Sep 2015

Total posts 73

Wow - amazing.


This group has had to sell overseas properties it owns to reduce debt as apparently the mainland Chinese govt has had it under the microscope.

I am not an accountant but there are suggestions online that HNA's accounts lack transparency.

popsicles

Member since 17 Jun 2018

Total posts 8

I tried updating but it hasn’t worked - they also own Suparna Airlines, Hong Kong Airlines and HK Express. Likely to have missed more.

kimshep

Qantas - Qantas Frequent Flyer

Member since 11 Oct 2014

Total posts 412

With the recent accidental death of HNA Chairman Chen Fang in Paris, I would expect some considerable changes in management and strategy from within the group. And as @traveller14 succinctly notes, the Chinese Mainland Government may enforce some further unforeseen restrictions based on capital raising. Hence the recent HNA divestment in a certain large US-based hotel chain.

Whether HNA has 'too many airlines' in its portfolio is an interesting question. The last 6 in the list are shareholdings in airlines outside of China. Holding such shares can be either highly clever in terms of feed to your own product .. or the reverse - highly problematic, as we've recently seen with Etihad's failed investment strategy. And, in reality, you won't get to 're-organise / restructure' or merge these foreign carriers in any meaningful way. National and international rights ensure that.

However, within mainland China, each of HNA's carrier brands seek to fulfill a different strategic role, based on marketing knowledge and need. These include full-service legacy, LCC, Low-Fare, the only privately owned commercially operated (Lucky) and that is before you consider the split between international and domestic. Also, when you are dealing with secondary Chinese cities that have populations over 8-10 million or more people as a captive market, who is to say whether HNA has 'too many'?

If you were to look at QF's ownership, many think of it as one .. but QF also owns JQ in Australia, owns a share of Jetstar (Japan), Jetstar Pacific (Vietnam USA etc) and Jetstar Asia (Singapore). Let's not forget QF's 46% shareholding in Fiji Airways as well as Eastern Australia domestic regional. That quite a portfolio as well - with a lot smaller market.

Last editedby kimshep at Aug 01, 2018, 02:17 PM.

Geoffair

Member since 04 May 2018

Total posts 42

Probably due to government policy and restrictions and l'm sure provinces and cities can subsidise airlines so they have their own airline.

Not quite to the extreme of Air India ($6billion!) however it works there.
Shareholding in foriegn airlines is normal business for most majors.

CBR boy

Member since 12 Feb 2015

Total posts 61

Wow - amazing.

This group has had to sell overseas properties it owns to reduce debt as apparently the mainland Chinese govt has had it under the microscope.

I am not an accountant but there are suggestions online that HNA's accounts lack transparency.

Most business matters in China lack transparency.

Pallydou

Cathay Pacific - The Marco Polo Club

Member since 02 Jul 2018

Total posts 22

This is obviously partially due to wanting to raise lots of capital and Chinese government restrictions, but HNA’s aviation strategy seems a bit ridiculous. They currently own (or partially own) the following airlines:

Hainan Airlines
Tianjin Airlines
Grand China Air
Air Changan
Beijing Capital Airlines
Fuzhou Airlines
Lucky Air
Urumqi Airlines
GX Airlines
Virgin Australia
MyCargo Airlines
Aigle Azur
Comair
Azul
TAP Airlines

Shouldn’t they, at the very least, try to streamline their offering somewhat? Or present a more coherent product to customers?


Well, you missed Hong Kong Airlines and Hong Kong Express.

jch

Virgin Australia - Velocity Rewards

Member since 15 Nov 2017

Total posts 143

At least flying with them is a cheap way to Velocity Platinum

popsicles

Member since 17 Jun 2018

Total posts 8

This is obviously partially due to wanting to raise lots of capital and Chinese government restrictions, but HNA’s aviation strategy seems a bit ridiculous. They currently own (or partially own) the following airlines:

Hainan Airlines
Tianjin Airlines
Grand China Air
Air Changan
Beijing Capital Airlines
Fuzhou Airlines
Lucky Air
Urumqi Airlines
GX Airlines
Virgin Australia
MyCargo Airlines
Aigle Azur
Comair
Azul
TAP Airlines

Shouldn’t they, at the very least, try to streamline their offering somewhat? Or present a more coherent product to customers?


Well, you missed Hong Kong Airlines and Hong Kong Express.

I included them afterwards. They also own Africa World Airlines and West Air as well.

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