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The future of Hainan Airlines group of airlines

Mon Dec 09, 2019 4:13 am

Looks like HNA may become the airline that is also in trouble. Not only the trouble at HK Airlines, now many planes from the Mainland China like the A350's. A330 and most NB aircraft has been found stored (not to mention the MAX grouding). In addition to that, HNA also sells some undelivered aircraft e.g 787-9 to Vistara, Bamboo Airways etc. Is HNA running out of cash now and is the airline going to collapse as well? So what is the future in HNA Aviation after facing lots of troubles in recent times?
Last edited by qf789 on Tue Dec 10, 2019 11:10 pm, edited 1 time in total.
Reason: Updated title for clarity
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JustSomeDood
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Re: The future of HNA Aviation

Mon Dec 09, 2019 7:11 am

HNA being in trouble is not new news. They have been stiffing suppliers, lessors and financiers for a very, very long time. If the whole bloody group collapses the ensuing chaos would be Jet Airways times 10, them collapsing would also throw a big spotlight on the asset and debt bubbles brewing in the balance sheets of all the Chinese banks (big slap in the face for the government). Therefore its pretty hard to see them actually be allowed to collapse, although it is likely they'd have to divest stakes in many of their airlines (HNA is enough of a flaming tire fire in corporate structure and governance that they could collapse even with government intervention).
 
Blerg
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Re: The future of HNA Aviation

Mon Dec 09, 2019 7:19 am

JustSomeDood wrote:
HNA being in trouble is not new news. They have been stiffing suppliers, lessors and financiers for a very, very long time. If the whole bloody group collapses the ensuing chaos would be Jet Airways times 10, them collapsing would also throw a big spotlight on the asset and debt bubbles brewing in the balance sheets of all the Chinese banks (big slap in the face for the government). Therefore its pretty hard to see them actually be allowed to collapse, although it is likely they'd have to divest stakes in many of their airlines (HNA is enough of a flaming tire fire in corporate structure and governance that they could collapse even with government intervention).


So how did they get to this stage?
 
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SCFlyer
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Re: The future of HNA Aviation

Mon Dec 09, 2019 7:22 am

A question, what would happen of HNA's remaining stakes in other airlines (e.g VA) should HNA file for Bankruptcy Protection or Liquidation?
As I'm aware HNA has been trying to offload the VA stake to no success (no serious buyer on the horizon).
 
chonetsao
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Re: The future of HNA Aviation

Mon Dec 09, 2019 10:03 am

Blerg wrote:
JustSomeDood wrote:
HNA being in trouble is not new news. They have been stiffing suppliers, lessors and financiers for a very, very long time. If the whole bloody group collapses the ensuing chaos would be Jet Airways times 10, them collapsing would also throw a big spotlight on the asset and debt bubbles brewing in the balance sheets of all the Chinese banks (big slap in the face for the government). Therefore its pretty hard to see them actually be allowed to collapse, although it is likely they'd have to divest stakes in many of their airlines (HNA is enough of a flaming tire fire in corporate structure and governance that they could collapse even with government intervention).


So how did they get to this stage?


The prime reason is rapid expansion without realizing the market can not absorb such accelerated growth. But the reason are several folds:
1, Failed capital investments. Several years ago, HNA is HNA, a group that concentrated in development of tourism in Hainan Island and a major airline in China. But now, its parent groups had investments in Hilton, Deutsche Bank, Virgin Australia, a failed Algeria airline based in France, Logistics, Supermarket, Ground service and airline catering business...The scale makes Korean Air a small company.
2, Growth without foundation. Post 2008, lots of speculative funds (hot money) went to China to seek growth and on the mantra of not to miss an opportunity while Europe and the US is suffering from the collapse of its financial system. Easy money brought lots of Chinese company a false sense of security and ultimately, lots of questionable investment decision were taken as the hot money is plenty and cheap.
3, Airline expansion without a hub. HNA has a major hub in Hainan Islands, Xi'an and Beijing. The problem is, HNA's share in Beijing is too small. Under the OLD one airline one route system, HNA can not get into major business routes from Beijing to cities like London or New York. As Air China is firmly controlling all the destinations that can make money. Instead, HNA had to settle for secondary cities that the demand is soft. But in the same time, HNA bought too many WB long haul planes. So they are forced to transfer some of those planes to secondary Chinese cities to fly for local subsidies. But a typical local subsidies only last for a good of 2 years and then it is reduced to ended. This business practice would meet its bottleneck as HNA recently found out..
4, Local airlines subsidiaries for local land ownership. To aide its balance sheet and growth, HNA entered cooperation with several local Chinese governments that are desperately seeking a home airline. So a handful of smaller airlines as subsidiaries are set up (Capital, Tianjin......), and in exchange, the local government granted HNA lands for development. It is very well when real estate market is hot. But it is a drag on financial performance when market is stagnant. Also, when you use the ownership of land as the collateral for the bank loans, its value does not stay at a level forever.
5, Political.
This is one of the murky and less discussed aspect of HNA. I could not tell you exactly why and how. But let us start with the establishment of HNA, it was supported by George Soros at the start-up stage. The current HNA is supported by several layers of Chinese governments and heavy weight insiders. But it did not help HNA rather than keep it on life support. There are many questionable steps taken by HNA last few years. I am not going to talk about the mysteries death of its vice-president Wang Jian in France and then the arrest of the chief of a famous international organisation of policeman based in France by Chinese authorities. That is just too much speculations. I am going to point out an on-going trouble in Deutsche Bank. Before Deutsche Bank got in big trouble, it owned shares in a big Chinese bank called Huaxia Bank. Subsequently Deutsche Bank sold its share and made big money. But, the money it gained from the sale could not be moved out from China. And the next interesting step is that HNA bought stakes in Deutsche Bank.

All above things I mentioned is well documented in the press. And that is only a tip of iceberg. HNA itself is not involved in the political drama, but its parent company is. It might be an outsider, but since the death of its vice in France, it is now in the center of a conspiracy theory.

Will HNA survive? I believe so. But I won't be shocked if it is taken over by bigger rivals of Chinese SOEs including Air China, China Eastern or some major Chinese banks. It is one of the very underrated drama going on currently in aviation industry. But it will take a lot of patient and follow up with press releases to see the whole picture.
 
Blerg
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Re: The future of HNA Aviation

Mon Dec 09, 2019 3:48 pm

chonetsao wrote:
Blerg wrote:
JustSomeDood wrote:
HNA being in trouble is not new news. They have been stiffing suppliers, lessors and financiers for a very, very long time. If the whole bloody group collapses the ensuing chaos would be Jet Airways times 10, them collapsing would also throw a big spotlight on the asset and debt bubbles brewing in the balance sheets of all the Chinese banks (big slap in the face for the government). Therefore its pretty hard to see them actually be allowed to collapse, although it is likely they'd have to divest stakes in many of their airlines (HNA is enough of a flaming tire fire in corporate structure and governance that they could collapse even with government intervention).


So how did they get to this stage?


The prime reason is rapid expansion without realizing the market can not absorb such accelerated growth. But the reason are several folds:
1, Failed capital investments. Several years ago, HNA is HNA, a group that concentrated in development of tourism in Hainan Island and a major airline in China. But now, its parent groups had investments in Hilton, Deutsche Bank, Virgin Australia, a failed Algeria airline based in France, Logistics, Supermarket, Ground service and airline catering business...The scale makes Korean Air a small company.
2, Growth without foundation. Post 2008, lots of speculative funds (hot money) went to China to seek growth and on the mantra of not to miss an opportunity while Europe and the US is suffering from the collapse of its financial system. Easy money brought lots of Chinese company a false sense of security and ultimately, lots of questionable investment decision were taken as the hot money is plenty and cheap.
3, Airline expansion without a hub. HNA has a major hub in Hainan Islands, Xi'an and Beijing. The problem is, HNA's share in Beijing is too small. Under the OLD one airline one route system, HNA can not get into major business routes from Beijing to cities like London or New York. As Air China is firmly controlling all the destinations that can make money. Instead, HNA had to settle for secondary cities that the demand is soft. But in the same time, HNA bought too many WB long haul planes. So they are forced to transfer some of those planes to secondary Chinese cities to fly for local subsidies. But a typical local subsidies only last for a good of 2 years and then it is reduced to ended. This business practice would meet its bottleneck as HNA recently found out..
4, Local airlines subsidiaries for local land ownership. To aide its balance sheet and growth, HNA entered cooperation with several local Chinese governments that are desperately seeking a home airline. So a handful of smaller airlines as subsidiaries are set up (Capital, Tianjin......), and in exchange, the local government granted HNA lands for development. It is very well when real estate market is hot. But it is a drag on financial performance when market is stagnant. Also, when you use the ownership of land as the collateral for the bank loans, its value does not stay at a level forever.
5, Political.
This is one of the murky and less discussed aspect of HNA. I could not tell you exactly why and how. But let us start with the establishment of HNA, it was supported by George Soros at the start-up stage. The current HNA is supported by several layers of Chinese governments and heavy weight insiders. But it did not help HNA rather than keep it on life support. There are many questionable steps taken by HNA last few years. I am not going to talk about the mysteries death of its vice-president Wang Jian in France and then the arrest of the chief of a famous international organisation of policeman based in France by Chinese authorities. That is just too much speculations. I am going to point out an on-going trouble in Deutsche Bank. Before Deutsche Bank got in big trouble, it owned shares in a big Chinese bank called Huaxia Bank. Subsequently Deutsche Bank sold its share and made big money. But, the money it gained from the sale could not be moved out from China. And the next interesting step is that HNA bought stakes in Deutsche Bank.

All above things I mentioned is well documented in the press. And that is only a tip of iceberg. HNA itself is not involved in the political drama, but its parent company is. It might be an outsider, but since the death of its vice in France, it is now in the center of a conspiracy theory.

Will HNA survive? I believe so. But I won't be shocked if it is taken over by bigger rivals of Chinese SOEs including Air China, China Eastern or some major Chinese banks. It is one of the very underrated drama going on currently in aviation industry. But it will take a lot of patient and follow up with press releases to see the whole picture.



Fantastic reply, thank you very much. What was the reason Soros initially invested in HNA and why did he leave the company?
 
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Momo1435
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Re: The future of HNA Aviation

Mon Dec 09, 2019 4:41 pm

SCFlyer wrote:
A question, what would happen of HNA's remaining stakes in other airlines (e.g VA) should HNA file for Bankruptcy Protection or Liquidation?
As I'm aware HNA has been trying to offload the VA stake to no success (no serious buyer on the horizon).

Bankruptcy laws in China are changing rapidly in China, so how it will be exactly handled if the government let the HNA group or it's airlines remaines to be seen.

But as these stakes will be seen as an assett they will be sold, but if these will be sold individually or as part of a larger package remains to be seen. That depends on so many different factors. As there haven't been too many large bankruptcies in China there are simply not enough local examples on how this will be handled.
 
eamondzhang
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Re: The future of HNA Aviation

Mon Dec 09, 2019 9:12 pm

Monies are still being injected into the carrier despite all the troubles at the instruction from the Central Government, while most of their subsidiary airlines have been offloaded (sans JD, GS and HX). JD was sold before but rumour is the new owner refuses to take it up after HNA striked it with RMB 10 billion's debt (after signing the deal) from nowhere in a desperate attempt to reduce its own debt.

Michael
 
chonetsao
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Re: The future of HNA Aviation

Mon Dec 09, 2019 9:28 pm

Blerg wrote:
chonetsao wrote:
Blerg wrote:

So how did they get to this stage?


Fantastic reply, thank you very much. What was the reason Soros initially invested in HNA and why did he leave the company?


That was two piece of the puzzles that I yet to discover. The only reading publicly available was that when HNA current owner and the deceased VP founded HNA in the turn of 1990s, they went overseas seeking funds to kick start the company. For whatever season, George Soros believed in the two young Chinese and provided funds necessary.

Regarding why Soros is no longer involved (I hope, and as far as I can tell, he should have exited his investment position in HNA long time ago), my personal speculation is that Soros does not invest for long period. Plus, the Soros track record in 1997 Asian Financial Crisis does not help his image around Asia.
 
zakuivcustom
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Re: The future of HNA Aviation

Tue Dec 10, 2019 7:03 pm

https://inews.hket.com/article/2516896/【港航危機】海航旗下公司欠款4300萬%20工銀亞洲入禀高等法院追討?mtc=20023

(Chinese only)

And Grand China Air (Hong Kong) (Subsidiary of Grand China Air of mainland China, which itself is part of HNA, with GCA of China defaulting on a loan awhile back) is now sued by ICBC Asia (The subsidiary of ICBC in Hong Kong)

Keep in mind, though, that ICBC (The parent based in mainland China) is one of the bank that loan money to HNA (Along with others) last week as a "bailout"...

chonetsao wrote:
The prime reason is rapid expansion without realizing the market can not absorb such accelerated growth. But the reason are several folds:
1, Failed capital investments. Several years ago, HNA is HNA, a group that concentrated in development of tourism in Hainan Island and a major airline in China. But now, its parent groups had investments in Hilton, Deutsche Bank, Virgin Australia, a failed Algeria airline based in France, Logistics, Supermarket, Ground service and airline catering business...The scale makes Korean Air a small company.
2, Growth without foundation. Post 2008, lots of speculative funds (hot money) went to China to seek growth and on the mantra of not to miss an opportunity while Europe and the US is suffering from the collapse of its financial system. Easy money brought lots of Chinese company a false sense of security and ultimately, lots of questionable investment decision were taken as the hot money is plenty and cheap.
3, Airline expansion without a hub. HNA has a major hub in Hainan Islands, Xi'an and Beijing. The problem is, HNA's share in Beijing is too small. Under the OLD one airline one route system, HNA can not get into major business routes from Beijing to cities like London or New York. As Air China is firmly controlling all the destinations that can make money. Instead, HNA had to settle for secondary cities that the demand is soft. But in the same time, HNA bought too many WB long haul planes. So they are forced to transfer some of those planes to secondary Chinese cities to fly for local subsidies. But a typical local subsidies only last for a good of 2 years and then it is reduced to ended. This business practice would meet its bottleneck as HNA recently found out..
4, Local airlines subsidiaries for local land ownership. To aide its balance sheet and growth, HNA entered cooperation with several local Chinese governments that are desperately seeking a home airline. So a handful of smaller airlines as subsidiaries are set up (Capital, Tianjin......), and in exchange, the local government granted HNA lands for development. It is very well when real estate market is hot. But it is a drag on financial performance when market is stagnant. Also, when you use the ownership of land as the collateral for the bank loans, its value does not stay at a level forever.
5, Political.
This is one of the murky and less discussed aspect of HNA. I could not tell you exactly why and how. But let us start with the establishment of HNA, it was supported by George Soros at the start-up stage. The current HNA is supported by several layers of Chinese governments and heavy weight insiders. But it did not help HNA rather than keep it on life support. There are many questionable steps taken by HNA last few years. I am not going to talk about the mysteries death of its vice-president Wang Jian in France and then the arrest of the chief of a famous international organisation of policeman based in France by Chinese authorities. That is just too much speculations. I am going to point out an on-going trouble in Deutsche Bank. Before Deutsche Bank got in big trouble, it owned shares in a big Chinese bank called Huaxia Bank. Subsequently Deutsche Bank sold its share and made big money. But, the money it gained from the sale could not be moved out from China. And the next interesting step is that HNA bought stakes in Deutsche Bank.

All above things I mentioned is well documented in the press. And that is only a tip of iceberg. HNA itself is not involved in the political drama, but its parent company is. It might be an outsider, but since the death of its vice in France, it is now in the center of a conspiracy theory.

Will HNA survive? I believe so. But I won't be shocked if it is taken over by bigger rivals of Chinese SOEs including Air China, China Eastern or some major Chinese banks. It is one of the very underrated drama going on currently in aviation industry. But it will take a lot of patient and follow up with press releases to see the whole picture.


Ultimately what starts it all is the fact that Chinese Central Gov't put a stop into borrowing money to buy foreign assets in 2017, as a mean to stop money outflow from mainland China (Keep in mind that the whole Chinese economy is a giant bubble being propped up even right now). It basically exposed HNA as their failed foreign investments are now amplified. No more easy, hot money, either.

Will HNA survive, though? The central gov't is just not going to let it fail IMHO (Create too much "social inharmony").
 
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frigatebird
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Re: The future of HNA Aviation

Tue Dec 10, 2019 7:11 pm

chonetsao wrote:
3, Airline expansion without a hub. HNA has a major hub in Hainan Islands, Xi'an and Beijing. The problem is, HNA's share in Beijing is too small. Under the OLD one airline one route system, HNA can not get into major business routes from Beijing to cities like London or New York. As Air China is firmly controlling all the destinations that can make money. Instead, HNA had to settle for secondary cities that the demand is soft. But in the same time, HNA bought too many WB long haul planes. So they are forced to transfer some of those planes to secondary Chinese cities to fly for local subsidies. But a typical local subsidies only last for a good of 2 years and then it is reduced to ended. This business practice would meet its bottleneck as HNA recently found out..

Thank you very much for your insights. I do wonder, with your point above, why did CAAC allocate so many of the centrally purchased aircraft to HNA? It must have been pretty clear to CAAC too the HNA Group was biting off far more than they could chew.
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Polot
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Re: The future of HNA Aviation

Tue Dec 10, 2019 7:22 pm

frigatebird wrote:
chonetsao wrote:
3, Airline expansion without a hub. HNA has a major hub in Hainan Islands, Xi'an and Beijing. The problem is, HNA's share in Beijing is too small. Under the OLD one airline one route system, HNA can not get into major business routes from Beijing to cities like London or New York. As Air China is firmly controlling all the destinations that can make money. Instead, HNA had to settle for secondary cities that the demand is soft. But in the same time, HNA bought too many WB long haul planes. So they are forced to transfer some of those planes to secondary Chinese cities to fly for local subsidies. But a typical local subsidies only last for a good of 2 years and then it is reduced to ended. This business practice would meet its bottleneck as HNA recently found out..

Thank you very much for your insights. I do wonder, with your point above, why did CAAC allocate so many of the centrally purchased aircraft to HNA? It must have been pretty clear to CAAC too the HNA Group was biting off far more than they could chew.


Being a “private” airline I believe HNA can buy whatever foreign aircraft it wants. It doesn’t need CAAC to order and give them an allocation.
 
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frigatebird
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Re: The future of HNA Aviation

Tue Dec 10, 2019 7:27 pm

Polot wrote:
frigatebird wrote:
chonetsao wrote:
3, Airline expansion without a hub. HNA has a major hub in Hainan Islands, Xi'an and Beijing. The problem is, HNA's share in Beijing is too small. Under the OLD one airline one route system, HNA can not get into major business routes from Beijing to cities like London or New York. As Air China is firmly controlling all the destinations that can make money. Instead, HNA had to settle for secondary cities that the demand is soft. But in the same time, HNA bought too many WB long haul planes. So they are forced to transfer some of those planes to secondary Chinese cities to fly for local subsidies. But a typical local subsidies only last for a good of 2 years and then it is reduced to ended. This business practice would meet its bottleneck as HNA recently found out..

Thank you very much for your insights. I do wonder, with your point above, why did CAAC allocate so many of the centrally purchased aircraft to HNA? It must have been pretty clear to CAAC too the HNA Group was biting off far more than they could chew.


Being a “private” airline I believe HNA can buy whatever foreign aircraft it wants. It doesn’t need CAAC to order and give them an allocation.

Oh, I wasn't aware of that. Thank you :thumbsup:
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Re: The future of HNA Aviation

Tue Dec 10, 2019 7:51 pm

zakuivcustom wrote:
Ultimately what starts it all is the fact that Chinese Central Gov't put a stop into borrowing money to buy foreign assets in 2017, as a mean to stop money outflow from mainland China (Keep in mind that the whole Chinese economy is a giant bubble being propped up even right now). It basically exposed HNA as their failed foreign investments are now amplified. No more easy, hot money, either.

Will HNA survive, though? The central gov't is just not going to let it fail IMHO (Create too much "social inharmony").

All growing economies eventually go into recession. There is always over-expansion. The reality is the HNA real estate is exposing what I believe to be transportation over-expansion in China. The fact airlines are beholden to a failed real estate empire just makes it worse.

Failure might be inharmonious, but it is the fastest way to return air travel in China to a healthy market.

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zakuivcustom
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Re: The future of HNA Aviation

Tue Dec 10, 2019 8:03 pm

frigatebird wrote:
Oh, I wasn't aware of that. Thank you


Adding on, if CAAC was the one that actually allocates those aircrafts to HNA, you would NOT see the current situation where there are literally A330s and A350s sitting in TLS in colors of HNA Group Airlines.
 
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Re: The future of HNA Aviation

Tue Dec 10, 2019 8:14 pm

At what point does an airline that is being allegedly run short cash become a safety issue.
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zakuivcustom
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Re: The future of HNA Aviation

Wed Dec 11, 2019 1:18 am

lightsaber wrote:
zakuivcustom wrote:
Ultimately what starts it all is the fact that Chinese Central Gov't put a stop into borrowing money to buy foreign assets in 2017, as a mean to stop money outflow from mainland China (Keep in mind that the whole Chinese economy is a giant bubble being propped up even right now). It basically exposed HNA as their failed foreign investments are now amplified. No more easy, hot money, either.

Will HNA survive, though? The central gov't is just not going to let it fail IMHO (Create too much "social inharmony").

All growing economies eventually go into recession. There is always over-expansion. The reality is the HNA real estate is exposing what I believe to be transportation over-expansion in China. The fact airlines are beholden to a failed real estate empire just makes it worse.

Failure might be inharmonious, but it is the fastest way to return air travel in China to a healthy market.

Lightsaber


Getting somewhat off topic, but IMHO it is not just over-expansion in transportation. The whole Chinese economy is a bubble more or less with too much speculative investments and easy money.

As for HNA itself - instead of an airline they wanted to conquer the world. Even way back when they first start buying basically everything, people are already wondering whether it is sustainable or not.

Actually, now that I think about it, HNA might just as well becoming one of those company similar to Japanese zombie company - will have income but only enough to cover debt payment and nothing more.
 
bhxdtw
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Re: The future of Hainan Airlines group of airlines

Wed Dec 11, 2019 2:15 am

Can someone list all the airlines part of the group.

Thx :)
 
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alex0easy
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Re: The future of Hainan Airlines group of airlines

Wed Dec 11, 2019 2:38 am

bhxdtw wrote:
Can someone list all the airlines part of the group.

Thx :)


https://en.wikipedia.org/wiki/HNA_Group#HNA_Aviation
 
by738
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Re: The future of Hainan Airlines group of airlines

Wed Feb 19, 2020 7:32 pm

is Hainan in (more) trouble?
 
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Polot
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Re: The future of Hainan Airlines group of airlines

Wed Feb 19, 2020 7:35 pm

by738 wrote:
is Hainan in (more) trouble?

Well obviously being based in a country that is currently the epicenter of a epidemic resulting in the need to cancel thousands of flights and park chunks of their fleet isn’t helping them.
 
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PepeTheFrog
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Re: The future of Hainan Airlines group of airlines

Wed Feb 19, 2020 7:48 pm

https://www.bloomberg.com/news/articles ... s-business

Word is on the street the Chinese government will buy HNA Group and sell all airline assets.

The end is nearby...
Good moaning!
 
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Re: The future of Hainan Airlines group of airlines

Wed Feb 19, 2020 10:32 pm

We flew HU back in October SEA-PEK and PVG-SEA...both excellent flights with lovely crews. I feel so badly for them all (and for what all the Chinese people are going through). Anyone whose jobs are involved in tourism or business travel are likely out of a job or soon will be. I imagine before long we'll be hearing of hotels shutting down as well if that isn't already happening. What a sad situation for all, particularly in the areas hardest hit.
 
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Revelation
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Re: The future of Hainan Airlines group of airlines

Thu Feb 20, 2020 6:56 pm

PepeTheFrog wrote:
https://www.bloomberg.com/news/articles/2020-02-19/china-said-to-near-takeover-of-hna-group-as-virus-hits-business

Word is on the street the Chinese government will buy HNA Group and sell all airline assets.

The end is nearby...

It seems they were leading a "race to the bottom" in terms of speculative leveraged investing.

In retrospect it may be that CV putting an end to it is a beneficial side effect of the terrible CV outbreak.

Maybe some more sustainable airlines can move forward once HNA airline assets are redistributed?
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ChrisNH38
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Re: The future of Hainan Airlines group of airlines

Thu Feb 20, 2020 7:49 pm

This is so sad. Hainan made BOS a target when the 787 was just on CAD systems as an idea. They wanted to fly there, seeing with clarity--many years beforehand--that the market was a really strong and diverse one.
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Dieuwer
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Re: The future of Hainan Airlines group of airlines

Thu Feb 20, 2020 7:57 pm

ChrisNH38 wrote:
This is so sad. Hainan made BOS a target when the 787 was just on CAD systems as an idea. They wanted to fly there, seeing with clarity--many years beforehand--that the market was a really strong and diverse one.


I hope CA or another Mainland airline will take-over BOS-PEK.
 
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ChrisNH38
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Re: The future of Hainan Airlines group of airlines

Fri Feb 21, 2020 12:07 am

Dieuwer wrote:
ChrisNH38 wrote:
This is so sad. Hainan made BOS a target when the 787 was just on CAD systems as an idea. They wanted to fly there, seeing with clarity--many years beforehand--that the market was a really strong and diverse one.


I hope CA or another Mainland airline will take-over BOS-PEK.


Maybe EVA? Apathy from our own stateside carriers to serve Asia from BOS might well bring some colorful tails to Logan in 2021 once this virus is managed.
https://my.flightradar24.com/ChrisNH
 
Dieuwer
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Re: The future of Hainan Airlines group of airlines

Fri Feb 21, 2020 12:46 am

ChrisNH38 wrote:
Dieuwer wrote:
ChrisNH38 wrote:
This is so sad. Hainan made BOS a target when the 787 was just on CAD systems as an idea. They wanted to fly there, seeing with clarity--many years beforehand--that the market was a really strong and diverse one.


I hope CA or another Mainland airline will take-over BOS-PEK.


Maybe EVA? Apathy from our own stateside carriers to serve Asia from BOS might well bring some colorful tails to Logan in 2021 once this virus is managed.


EVA is not Mainland China.
 
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adamh8297
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Re: The future of Hainan Airlines group of airlines

Fri Feb 21, 2020 1:12 am

Dieuwer wrote:
ChrisNH38 wrote:
Dieuwer wrote:

I hope CA or another Mainland airline will take-over BOS-PEK.


Maybe EVA? Apathy from our own stateside carriers to serve Asia from BOS might well bring some colorful tails to Logan in 2021 once this virus is managed.


EVA is not Mainland China.


Unless its CA we may never again see BOS-PEK but BOS-PKX is a possibility if CAAC gives CZ Tier I frequencies for Boston-Beijing. MU should get BOS-PVG if they want it.

HU going away benefits the Asian carriers in BOS, SEA, ORD and SJC once this outbreak diminishes in the short term since I believe the HU Tier I frequencies will not be given out right away.
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2019: CX BOS-HKG, WE HKG-HKT, CA HKT-PEK-EWR, B6 EWR-BOS
 
Dieuwer
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Re: The future of Hainan Airlines group of airlines

Fri Feb 21, 2020 1:24 am

adamh8297 wrote:
Dieuwer wrote:
ChrisNH38 wrote:

Maybe EVA? Apathy from our own stateside carriers to serve Asia from BOS might well bring some colorful tails to Logan in 2021 once this virus is managed.


EVA is not Mainland China.


Unless its CA we may never again see BOS-PEK but BOS-PKX is a possibility if CAAC gives CZ Tier I frequencies for Boston-Beijing. MU should get BOS-PVG if they want it.

HU going away benefits the Asian carriers in BOS, SEA, ORD and SJC once this outbreak diminishes in the short term since I believe the HU Tier I frequencies will not be given out right away.


Does it matter if we get BOS-PEK vs BOS-PKX?
 
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adamh8297
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Re: The future of Hainan Airlines group of airlines

Fri Feb 21, 2020 1:29 am

Dieuwer wrote:
adamh8297 wrote:
Dieuwer wrote:

EVA is not Mainland China.


Unless its CA we may never again see BOS-PEK but BOS-PKX is a possibility if CAAC gives CZ Tier I frequencies for Boston-Beijing. MU should get BOS-PVG if they want it.

HU going away benefits the Asian carriers in BOS, SEA, ORD and SJC once this outbreak diminishes in the short term since I believe the HU Tier I frequencies will not be given out right away.


Does it matter if we get BOS-PEK vs BOS-PKX?


Not really- we should just hope for BOS-BJS (all Beijing airport code).

In the short term - CA would give more connecting options but connections are not a pleasant experience in PEK (i wouldn't go under 2 hours).
Airlines flown: A3, AA, AC, AF, AM, BA, B6, CA, CO, CX, DL, EA, EL, IB, LH, MI, MQ, NH, NW, NZ, OU, PE, QF, S4, SQ, TP, UA, US, VS, WE, WN

2019: CX BOS-HKG, WE HKG-HKT, CA HKT-PEK-EWR, B6 EWR-BOS
 
oldJoe
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Re: The future of Hainan Airlines group of airlines

Fri Feb 21, 2020 1:36 am

Revelation wrote:
PepeTheFrog wrote:
https://www.bloomberg.com/news/articles/2020-02-19/china-said-to-near-takeover-of-hna-group-as-virus-hits-business

Word is on the street the Chinese government will buy HNA Group and sell all airline assets.

The end is nearby...

It seems they were leading a "race to the bottom" in terms of speculative leveraged investing.

In retrospect it may be that CV putting an end to it is a beneficial side effect of the terrible CV outbreak.

Maybe some more sustainable airlines can move forward once HNA airline assets are redistributed?


@Reavalation, I aggree 100% with you. They invested in so many diffrent markets and thought it can go on and on, forever like this. I see the ( horrible ) CV outbreak as th last nail in their coffin
 
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c933103
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HNA management taken over by Hainan government

Sat Feb 29, 2020 1:25 pm

https://www.wsj.com/articles/chinas-hna ... 1582981584
Can't find existing threads on it but HNA have made an announcement on their website that, according to request by HNA itself, Hainan provincial government will form a work group entering the company to deal with the risk in the company.
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DL747400
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Re: HNA management taken over by Hainan government

Sat Feb 29, 2020 3:34 pm

The dominos are beginning to fall, with the weakest collapsing first. HNA watchers have seen this coming for a while, but Coronavirus has clearly accelerated the timing.

https://www.scmp.com/business/companies ... oronavirus

This SCMP article above states: Under the plan, China would sell the bulk of HNA’s airline assets to the country’s three biggest carriers – Air China, China Southern Airlines and China Eastern Airlines.

Other recent mentions:

https://www.straitstimes.com/business/e ... s-business

https://onemileatatime.com/hainan-airli ... -takeover/

https://onemileatatime.com/hainan-airlines-end-near/
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zakuivcustom
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Re: HNA management taken over by Hainan government

Sat Feb 29, 2020 3:49 pm

DL747400 wrote:
The dominos are beginning to fall, with the weakest collapsing first. HNA watchers have seen this coming for a while, but Coronavirus has clearly accelerated the timing.

https://www.scmp.com/business/companies ... oronavirus

This SCMP article above states: Under the plan, China would sell the bulk of HNA’s airline assets to the country’s three biggest carriers – Air China, China Southern Airlines and China Eastern Airlines.

Other recent mentions:

https://www.straitstimes.com/business/e ... s-business

https://onemileatatime.com/hainan-airli ... -takeover/

https://onemileatatime.com/hainan-airlines-end-near/


https://finance.sina.cn/china/gncj/2020 ... l?from=wap

(Chinese only)
At least from news in China, it is stated (according to some "inside source") that the airlines of HNA won't be sold piece by piece. Hainan govt basically get into HNA group as part of bailout as Hainan govt deems Hainan Airlines itself an important piece of "public service" to the province.

It was also mentioned that, right now the airlines are literally losing 100M Yuan a day just on things like interest on loans.
 
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DL747400
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Re: HNA management taken over by Hainan government

Sat Feb 29, 2020 4:00 pm

zakuivcustom wrote:
It was also mentioned that, right now the airlines are literally losing 100M Yuan a day just on things like interest on loans.


Thanks for the info. Is that 100M Yuan a day referring to the amount that Hainan Airlines is losing on a daily basis? Or is that statement speaking collectively about all Chinese carriers as a group?

I can understand losing money from the impact of Coronavirus, but not sure I understand the statement regarding losing money on loan interest, since they would have to pay that anyway unless they allowed the load to go into default.
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zakuivcustom
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Re: HNA management taken over by Hainan government

Sat Feb 29, 2020 4:08 pm

DL747400 wrote:
zakuivcustom wrote:
It was also mentioned that, right now the airlines are literally losing 100M Yuan a day just on things like interest on loans.


Thanks for the info. Is that 100M Yuan a day referring to the amount that Hainan Airlines is losing on a daily basis? Or is that statement speaking collectively about all Chinese carriers as a group?

I can understand losing money from the impact of Coronavirus, but not sure I understand the statement regarding losing money on loan interest, since they would have to pay that anyway unless they allowed the load to go into default.


The number is Hainan Airlines alone, and is just an estimate (the real number is more than that).

I should have been more clear - they are paying hundreds of million just in interest every day. And with the nCoV reducing their income to almost nothing, it basically mean HU is losing 100s of million yuan every single day.
 
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DL747400
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Re: HNA management taken over by Hainan government

Sat Feb 29, 2020 4:19 pm

zakuivcustom wrote:
DL747400 wrote:
zakuivcustom wrote:
It was also mentioned that, right now the airlines are literally losing 100M Yuan a day just on things like interest on loans.


Thanks for the info. Is that 100M Yuan a day referring to the amount that Hainan Airlines is losing on a daily basis? Or is that statement speaking collectively about all Chinese carriers as a group?

I can understand losing money from the impact of Coronavirus, but not sure I understand the statement regarding losing money on loan interest, since they would have to pay that anyway unless they allowed the load to go into default.


The number is Hainan Airlines alone, and is just an estimate (the real number is more than that).

I should have been more clear - they are paying hundreds of million just in interest every day. And with the nCoV reducing their income to almost nothing, it basically mean HU is losing 100s of million yuan every single day.


Thanks again for the clarification. A grim picture indeed.
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NZ321
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Re: HNA management taken over by Hainan government

Sat Feb 29, 2020 5:28 pm

So does this mean that all of Hainan disappears? Or just some of it. I can't make this out.

Equally, which parts of Hainan will go where? Is Air China going to be the major winner in this? Who will take over the A330neo order? I imagine many of their international routes that fly 2-3 times a week will disappear along with the aircraft. Was never a sustainable position in the current market IMHO.

Lots of unanswered questions at the mo.

Sad to see a quality legacy Chinese carrier on the birnk but the writing has been on the wall for a fair while. Will be dad to see the red tails disappear.....
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Revelation
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Re: HNA management taken over by Hainan government

Sat Feb 29, 2020 6:05 pm

NZ321 wrote:
So does this mean that all of Hainan disappears? Or just some of it. I can't make this out.

Equally, which parts of Hainan will go where? Is Air China going to be the major winner in this? Who will take over the A330neo order? I imagine many of their international routes that fly 2-3 times a week will disappear along with the aircraft. Was never a sustainable position in the current market IMHO.

Lots of unanswered questions at the mo.

Sad to see a quality legacy Chinese carrier on the birnk but the writing has been on the wall for a fair while. Will be dad to see the red tails disappear.....

Well, as above, it seems the Hainan government wants to keep the airline intact. I'm not sure how that will go down. Presumably HNA Group will try to dump as many unperforming assets as they can in such a transaction. I don't see the A330neo order as an attractive asset. AirAsia X just deferred all theirs. The other major buyers include Iran (suspended due to sanctions) and lots of leasing companies. The only blue chip with a big order is DL. I can imagine financiers aren't that happy to provide attractive financing on them. And HNA's other big order is for MAX8, enough said.

I kind of doubt the other CN3 are in a position to absorb other airlines, unless the government is funding it all behind the scenes.
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Ziyulu
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Re: HNA management taken over by Hainan government

Sat Feb 29, 2020 6:41 pm

So will the name Hainan Airlines continue to exist? If there's a merger, which airline will take over?
 
MIflyer12
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Re: HNA management taken over by Hainan government

Sun Mar 01, 2020 1:38 pm

Revelation wrote:
Well, as above, it seems the Hainan government wants to keep the airline intact. I'm not sure how that will go down.


The Jet Airways and Alitalia experiences show that the frameworks of U.S. Chapter 11 (management-led restructuring) or Chapter 7 (trustee-led liquidation) do not apply.

In China, regional governments (through property leases and property sales) have a lot of money. So do state-owned banks (and state-owned banks can create more money out of thin air - see 'quantitative easing' in the U.S. and U.K.). Some entity will be able to save Hainan Airlines if it wants to. (For contrast, try to imagine the State of Texas buying AA.)
 
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Revelation
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Re: HNA management taken over by Hainan government

Sun Mar 01, 2020 3:49 pm

MIflyer12 wrote:
Revelation wrote:
Well, as above, it seems the Hainan government wants to keep the airline intact. I'm not sure how that will go down.


The Jet Airways and Alitalia experiences show that the frameworks of U.S. Chapter 11 (management-led restructuring) or Chapter 7 (trustee-led liquidation) do not apply.

In China, regional governments (through property leases and property sales) have a lot of money. So do state-owned banks (and state-owned banks can create more money out of thin air - see 'quantitative easing' in the U.S. and U.K.). Some entity will be able to save Hainan Airlines if it wants to. (For contrast, try to imagine the State of Texas buying AA.)

Very good point, but what I'm trying to get at is does the CN3 really want to see Hainan saved, or do they (and their constituent stake holders) want to see Hainan broken up. I could imagine in the short term the last thing they want is more airliners and employees, but in the medium to long term they would want to see a competitor who operates a lot of LCCs eliminated. Or maybe they don't care one way or the other, everyone is happy in the worker's paradise. I honestly have no way to know what they want, or why.
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goosebayguy
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Re: The future of Hainan Airlines group of airlines

Sun Mar 01, 2020 6:39 pm

Paywall
https://www.telegraph.co.uk/business/20 ... owngrades/

I have just read in the Telegraph that HNA is $75bn in debt. How on earth does an airline accumulate that kind of debt?
 
trex8
Posts: 5551
Joined: Sat Nov 02, 2002 9:04 am

Re: The future of Hainan Airlines group of airlines

Sun Mar 01, 2020 6:58 pm

goosebayguy wrote:
Paywall
https://www.telegraph.co.uk/business/20 ... owngrades/

I have just read in the Telegraph that HNA is $75bn in debt. How on earth does an airline accumulate that kind of debt?


Probably not the airline itself but Hainan group which ever the last decade has invested in almost anything you can buy outside China and some more!
 
leftcoast8
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Re: The future of Hainan Airlines group of airlines

Sun Mar 01, 2020 11:37 pm

If HU ends up permanently cutting their SZX-YVR and PEK/PVG-SEA routes, who will fill in the gap? Or will the routes be totally abandoned because they're subsidized?
 
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Re: The future of Hainan Airlines group of airlines

Sun Mar 01, 2020 11:52 pm

leftcoast8 wrote:
If HU ends up permanently cutting their SZX-YVR and PEK/PVG-SEA routes, who will fill in the gap? Or will the routes be totally abandoned because they're subsidized?

I only can see CA or CZ that can fill the gap if HU cuts. HU has so far cut many planes lately due to the recent coronavirus and unable to pay for the leasing as well.
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leftcoast8
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Re: The future of Hainan Airlines group of airlines

Mon Mar 02, 2020 12:25 am

SQ789 wrote:
I only can see CA or CZ that can fill the gap if HU cuts. HU has so far cut many planes lately due to the recent coronavirus and unable to pay for the leasing as well.


Speaking of CZ, what are the odds of PKX getting a PNW destination? Or CZ starting CAN-SEA? I know there's a Hong Kong-Shenzhen ferry.
 
Ishrion
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Re: The future of Hainan Airlines group of airlines

Mon Mar 02, 2020 12:27 am

leftcoast8 wrote:
PEK/PVG-SEA routes


American Airlines in partnership with Alaska :spin:

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