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The Hainan government in China is reportedly in talks to sell a major part of the HNA Group’s airline assets, including flagship Hainan Airlines.
According to Bloomberg, the conglomerate company has failed to meet financial obligations following the outbreak of coronavirus (Covid-19).
In the first half of 2019, the company reported that its operating profit dropped by 11%.
People familiar with the plans said that HNA’s airline assets may be sold to Air China, China Southern Airlines and China Eastern Airlines.
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By GlobalDataThe company has direct controls or holds stakes in various local carriers, including Hainan Airlines, Shanxi Airlines, Chan An Airlines and China Xinhua Airlines.
In recent weeks, following the outbreak of coronavirus in China, the company came under pressure as airlines were forced to cancel thousands of flights.
Hainan and other airlines sent their foreign pilots on unpaid leave to reduce loss, reported Reuters.
Coronavirus measures across major airports
Meanwhile, Hong Kong Airlines, which is also partly owned by HNA, is reported to have announced plans to lay off 400 jobs.
Hainan Airlines began service as a regional carrier in 1989. It operated flights between the provincial capital of Haikou with mainland China.
China’s aviation regulator also noted that it would support restructurings or merger plans to help airlines deal with the epidemic, CNBC reported.
As of 19 February, the Covid-19 death toll reached 2,128, while the number of confirmed cases reached 75,725.
