Chinese Government to Take Over Hainan Airlines
A take over of HNA Group Co is expected. The government of Hainan is said to be ready to take over the conglomerate and sell off its airline assets. The news comes after the coronavirus outbreak has hit the company’s ability to meet financial obligations.
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 recently. It got worse in recent weeks as it has come under pressure from the 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. The news was reported by Bloomberg today.
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 future developments closely.
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Great. One more change of plans for going to Japan in July to deal with 🙁
House of cards China