China's HNA to Buy Virgin Australia Stake

June 6, 2016
Virgin Australia and HNA Aviation Group Co., entered into an agreement to form a "strategic commercial alliance," according to a news release.

Virgin Australia and HNA Aviation Group Co., entered into an agreement to form a "strategic commercial alliance," according to a news release.  

Direct flights between Australia and China will be introduced under this new alliance, as well as co-operations of flight programs and promotions.  

"...The alliance will see us leverage the opportunities offered by China as well as the synergies of HNA’s comprehensive aviation supply chain,” Virgin Australia Chief Executive John Borghetti said. 

HNA, in support of the alliance, will make an equity investment in the Virgin Australia Group, and will  have a shareholding of approximately 13 per cent in the Group after the placement, according a Virgin Australia news release.  

HNA Aviation is the largest private operator of airlines in China, and China is Australia fastest-growing inbound travel market, Borghetti said in a news release. 

“HNA is committed to expanding in the airline industry through strategic investments in companies with strong market positions and excellent management teams," Chief Executive Office of HNA Group Tan Xiangdong said in an Virgin Australia news release. "We are excited to support the Virgin Australia Group through our investment and the strategic alliance. We look forward to working together to create a seamless travel experience between Australia and to China and to deliver further choice, value and excellence to travelers worldwide.” 

In April, HNA acquired another airline, Swiss-based gategroup, for $1.47 billion.