Day of reckoning for the HNA Group

By Vincent Valery

Jan. 31, 2021, © Leeham News: After years of financial struggles, the HNA Group finally declared bankruptcy on Jan. 29. Despite a government-led attempt at restructuring the over-indebted group, the group couldn’t avoid such a fate due to the struggles of its numerous subsidiaries exacerbated by the COVID-19 pandemic.

LNA wrote an article in the fall of 2019 on the group’s complex structure and ongoing financial struggles.

An overextended group

The HNA Group and airline subsidiary Hainan Airlines had stakes in the following carriers that operate the following fleets:



HNA Group airlines operate a total of more than 500 single-aisle and 100 twin-aisle, a large portion of which are on operating leases. Note though that the local governments usually own sizable stakes in those carriers along with the HNA Group.  Therefore, a number of those carriers should receive capital injections to continue operations.

As the situation remains fluid, Chinese authorities have their work cut out in unwinding HNA’s tangled web.



7 Comments on “Day of reckoning for the HNA Group

  1. It’s interesting to see how this will go. The Chinese governments lets the airlines compete, play, grow, everything as long as it’s in the interest of the country.

    Now they have to decide what will happen. Many solutions are possible but in the end government has a to approve.

    If they feel solutions don’t lead to a satisfactory solution (for Chinese infrastructure), they’ll step in.

  2. HNA Group is a big conglomerate. Like GM in the good old days. The unsustainable debt is at the group level I believe.

    From Bloomberg
    “Founded as an airline in the 1990s by chairman Chen Feng, HNA emerged from near obscurity half a decade ago to become the standard bearer for a cabal of Chinese empire builders that borrowed rapidly buy up trophy assets around the globe. Headquartered in China’s Hainan Island, HNA became the top shareholder of Deutsche Bank AG and Hilton Worldwide Holdings Inc. on the back of an acquisition spree that left it with one of the largest debt loads in the world.

    Luxury Properties

    While the conglomerate has been shedding billions of dollars worth of investments amid crushing repayment obligations since early 2018, it still has an assortment of assets, including Hainan Airlines Holding Co. Its non-aviation portfolio includes luxury properties and hotels in mainland China and overseas, such as the 648-foot skyscraper 245 Park Avenue in New York and part of an artificial island off Hainan called Pearl Island.

    HNA was already planning to pivot back to its aviation and tourism roots when the coronavirus hit China early last year, with the shutdown in air travel accelerating the company’s demise. As the pandemic hammered one of its last viable businesses, the government of Hainan seized control last February, appointing new leaders and assuming management of HNA’s debts.”


      Chinese financial publication Caixin has also reported strong interest from potential suitors in the airline, although it did not name who they might be. It said that Hainan Airlines, the country’s biggest non state-owned carrier, aimed to remain independent.

      “Hainan Airlines itself should be fine,” said Chinese aviation expert Li Xiaojin. “It is most likely Hainan Airlines will continue to operate, but there might be a change in ownership.”

    • Only one appears to be a Hong Kong airline, the group name comes from its largest airline Hainan Air , based on the largest Chinese island similar in size to Taiwan

  3. You are mistaken about the bankruptcy. It’s all stage managed. The filers to the courts are Hainan Development Bank, which is essentially the same UBO of HNA. It’s done so that they can carve out the non core businesses and the core aviation business. The non core will be placed in a trust with limited time frame to dispose of assets, that will then pay off the non core debts. That’s about 1000 companies out of 2300 HNA related companies. Its actually a very POSITIVE development. Gu Gang has moved on from CEO of the Group to lead the non core disposal. He has also been named CCP Chairman for the entire HNA group, giving him party and consequently govt clout to rid HNA of the old guard and also to recover misappropriated funds of roughly USD10B. Stay tuned, but HNA is gonna fly high again once Covid is over.

  4. HNA owns Frankfurt Hahn airport.
    China said HNA is not bankrupt, it is only restructuring.

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