China intends to take over indebted HNA Group Co (Hainan Airlines) as corona virus hits business

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The Chinese Government plans to take over indebted conglomerate HNA Group Co, that is headquartered in Haikou, Hainan, China and is suffering from the recent outbreak of the corona virus. According to business website Bloomberg.com, China intends to sell off its core airline assets (Hainan Airlines).

Website Onemileatatime.com thinks that the implications of this for Hainan Airlines remain to be seen, other than that it’s unlikely to be business as usual. Presumably there are a few ways this could play out:

  • Hainan Airlines could just be liquidated
  • The government could try to sell off Hainan Airlines to other investors
  • The government could simply merge Hainan Airlines into one of the state-owned airlines

On Weibo, rumor has it that Air China may be taking over Hainan Airlines, though it’s anyone’s guess if that will happen. Both Air China and Hainan Airlines operate most long haul flights out of Beijing, so in a way that’s a logical fit.

What we don’t know is what a takeover of Hainan by Air China would actually look like. Would Air China take over Hainan Airlines’ planes and staff, or would they essentially just shut down Hainan Airlines and eliminate a competitor?

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