HNA, of Hainan Airlines, takes 48% stake of France's Aigle Azur, giving backdoor European access

Hainan Airlines and Hong Kong Airlines parent HNA Group, one of the largest privately-owned Chinese conglomerates, has taken a 48% stake in niche French airline Aigle Azur, adding to HNA's foreign aviation interests in a Turkish cargo carrier and Ghanian LCC.

While HNA's intent does not always have a clear focus, the acquisition of a stake in Aigle Azur, unofficially valued at USD40 million, has one of the clearest rationales. By having a French AOC, HNA can have Aigle open France-China services, which HNA is effectively blocked from doing owing to Chinese restrictions that limits the number of local carriers on intercontinental routes. Aigle Azur will acquire two A330s, likely from HNA, for Paris-Beijing and other services.

Paradoxically, the justification for HNA may be the clearest of its investments, but the profitability of the price-sensitive and competitive Europe-China market remains to be proven.