HNA Group takes stake in Virgin Australia
Monday, 01 Jun, 2016
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China’s biggest private airline operator HNA Group is taking a stake of up to 19.9% in Virgin Australia.
The deal gives HNA Group a 13% stake with an option to increase to almost 20% over time.
The transaction doesn’t involve shareholder Air New Zealand’s bid to offload its own stake, but it dilutes Air NZ’s share of the company down to 22.5%, Virgin said.
HNA is injecting A$159 million in Virgin Australia and forms part of a wider strategic partnership.
Virgin and HNA Aviation, which owns Hainan Airlines and has interests in aircraft leasing, ground handling and airport operations, will cooperate on code sharing, frequent flyer programs and cross promotion of routes.
"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," said Virgin Australia Group Chief Executive Officer John Borghetti.
"In 2015, over one million Chinese travellers visited Australia, spending approximately A$8.3 billion in total on their journeys. By 2020, almost 1.5 million Chinese travellers are projected to visit Australia in a market expected to be worth up to A$13 billion."
Aside from Air NZ, Virgin Australia’s other shareholders include Singapore Airlines, Etihad Airways and the Virgin Group.
"We carry almost no traffic from China on our domestic network. This will change the dynamics. The way that China is growing, direct services in and out of China are very important," Borghetti added.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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