HNA investment in a US airline would boost Hainan Airlines in US-China market, reshape competition
HNA, the holding company that owns flagship airline Hainan Airlines, has grown a portfolio of airline investments outside greater China that has recently expanded to Brazil’s Azul, and could be extended to include TAP Portugal. Some of the stakes have been placed to allow HNA to be an active investor and boost its presence in the foreign market. With this general strategic objective – and cash to spend – it is logical for HNA to consider investing in a US airline.
China’s 'one airline, one route' policy generally permits only one Chinese airline to fly a long haul service. Hainan cannot serve blue-chip points like New York and Los Angeles from Beijing and Shanghai since Air China and China Eastern already serve those points. Hainan has instead developed a mostly secondary market network including Boston and Seattle. Purchasing a US airline to have it expand in China, or to launch all-new flights, would overcome these restrictions since there is no US limit on services as long as traffic rights are available. American, Delta and United all serve the Los Angeles-Shanghai route.
China-US open skies would permit HNA and its US partner to enter into a joint venture, and even share profits. Integration has not been a defining feature of HNA’s investments, but the potential ramifications of a US airline investment could be significant and wide-reaching. This potential trans-Pacific change comes as Canada's WestJet weighs an entry into Asian routes.
To access CAPA Premium Analysis you need a CAPA Membership
Your window into the latest insights
CAPA employs an industry-leading Analyst team based in Europe, North America, Asia and Australia who offer unique perspectives and independent and accurate commentary of critical industry developments globally. CAPA Members rely on our Analysis to unlock valuable insights and actionable intelligence to keep ahead of the game.
Big picture strategic view
Our Analysts don’t just report the news - they take a big picture strategic view of aviation dynamics, issues and trends and analyse the implications of these developments for you.
The CAPA Analyst team is based globally to ensure our CAPA Members have access to independent, unique perspectives covering an entire spectrum of daily, worldwide commercial aviation developments.
Customise your Alerts
CAPA Members can use CAPA Alerts to receive daily, weekly or monthly and customised updates on our Analysis.
I'm very impressed by the factual and detailed analysis CAPA is always doing.- CEO, Airline Member
Phone: +61 2 9241 3200 | Email: firstname.lastname@example.org