Ten affiliates of Chinese travel conglomerate HNA Group will be restructured after a high court moved forward with creditors’ bankruptcy petitions.
A Shanghai Stock Exchange filing confirms the requests were approved by China’s Hainan provincial high court following a failure to repay debts.
The ruling, which covers regional carriers Air Changan, Fuzhou Airlines, Grand China Air, GX Airlines, Lucky Air, and Urumqi Air, could have a significant impact on overall fleet size, according to a Cirium analysis published by FlightGlobal.
Together, the HNA affiliates lease 96 aircraft, ranging from Boeing 737s to Airbus A330s. They also operate a small fleet of Hainan Airlines and Hong Kong Airlines aircraft.
Earlier, Business Traveller reported that HNA was under severe financial stress even before the Covid-19 pandemic.
Beginning in 2015, the conglomerate purchased $50 billion worth of assets, including ground handling company Swissport and a stake in Hilton, only to divest the companies after a Chinese regulator crackdown.
By 2019, HNA had accumulated nearly $110 billion in debt and was eventually taken over by the Hainan provincial government in February 2020.
At this point, it is unclear how the bankruptcy will impact HNA flagship companies, including Hainan Airlines and Hong Kong Airlines. Business Traveller has approached HNA for comment.