HNA of Hainan Airlines buys 24% of Azul as China's airlines eye their final continent: South America

Having established a footprint in Australia, Europe and North America, this year Chinese airlines turned their attention - with government direction - to Africa. Now they are closing in on their latest continent: South America. China's HNA Group, which owns flagship Hainan Airlines, disclosed on 24-Nov-2015 that it would take a 24% stake in Azul for USD450 million, becoming the largest shareholder of Brazil's third largest airline.

This stake is HNA's largest airline acquisition by value, and most significant outside greater China. It follows a separate non-airline transaction in recent days and a slew of acquisitions over the summer, including Swissport, bringing known acquisition spend to over USD11 billion in a handful of months.

Unlike the US and European investments in Latin American carriers, HNA's objective is different. It wants to link South America with China but also, by all indications, to learn about an efficient domestic operation, which Azul has created in its own right. Air China serves São Paulo while other Chinese airlines rely on partners, but more fifth freedom Chinese services into Latin America are expected. Vancouver, the most popular North American point for Chinese carriers, hopes China will ask Canada for beyond rights to connect China with Latin America over Vancouver.