China’s HNA Group has worked to reduce a debt load that exceeded $100 billion, but continued to face problems paying for fuel, problems paying employees, and problems paying investors (HNA even offered investors airline airline tickets in lieu of interest payments).
HNA owns Hainan Airlines, Beijing Capital, Fuzhou Airlines, Lucky Air, Tianjin Airlines, Urumqi Air as well as stakes in Hong Kong Airlines, and minority holdings in Comair, Azul Brazilian, and TAP Air Portugal. Hong Kong Airlines was nearly shut down in recent months over lack of cash. They even turned off inflight entertainment systems because they couldn’t pay licensing fees. Seven of their grounded planes were seized by Hong Kong airport over unpaid fees.
The company’s corporate structure sometimes makes it difficult to discern what they own, what they’ve sold off, and what they’ve merely sold to themselves. However they’ve owned large or controlling stakes in Rezidor hotels, Hilton (25%), Gate Gourmet (100%, and Deutsche Bank (9.99%) among many others.
HNA’s troubles have only further exacerbated with coronavirus reducing travel. And now it appears HNA will be taken over by the Chinese provincial government of Hainan. Airline assets are expected to be sold to China Eastern and China Southern.
Chinese insurance and travel conglomerate Anbang, which almost acquired Starwood, was already taken over by the Chinese government.