China’s HNA Group takes stake in Virgin Australia
Contributors are not employed, compensated or governed by TD, opinions and statements are from the contributor directly
HNA Group, the fast-expanding Chinese travel and tourism conglomerate, has agreed to purchase a stake in Virgin Australia.
The company, which operates Hainan Airlines, Hong Kong Airlines and several other Chinese carriers, will pay AU$159 million (US$114m) for an initial 13% stake in the Australian company, although it could increase this to around 20% in future.
The investment will also lead to a commercial alliance between Virgin Australia and HNA’s Chinese carriers, with the possible introduction of direct flights between Australia and China, along with codesharing, frequent flyer and airport lounge partnerships.
John Borghetti, CEO of the Virgin Australia Group, said the deal would enable his airline to capitalise on the fast-growing Chinese travel and aviation sectors.
“The Chinese travel market represents Australia’s fastest growing and most valuable inbound travel market, with inbound passengers from China increasing by approximately 18% per year since 2010,” Borghetti said. “By 2020, almost 1.5 million Chinese travellers are projected to visit Australia in a market expected to be worth up to AU$13 billion.
“We are pleased to welcome HNA as a new shareholder and strategic alliance partner. The alliance will see us leverage the opportunities offered by China as well as the synergies of HNA’s comprehensive aviation supply chain.”
This investment marks the latest example of HNA flexing its financial muscles. The company’s tourism arm recently bought Carlson Hotels, while its aviation group has invested in France’s Aigle Azur and Brazil’s Azul, and is reportedly interested in acquiring a stake in Portugal’s national carrier, TAP. It also recently snapped up two major Swiss aviation companies, Swissport and Gategroup.
HNA’s Chinese airlines, which also include Tianjin Airlines, Lucky Air, Capital Airlines, West Air, Yangtze River Airlines, Air Changan and Fuzhou Airlines, fly more than 77 million passengers per year.
Comments are closed.