Monday 31 December 2018

CHINA: Hainan Airlines Sells Its Building For US$190M

Hainan Airlines, the largest civilian-run air transport company in China, says it has sold its wholly-owned subsidiary, Beijing Guosheng Property Management Co. Ltd., in a deal worth 1.299 billion yuan (US$190 million).

According to the report, 100% of the equity will be transferred to the Beijing Houpu Yunde Investment Management Partnership, which is 99.99% held by Beijing Vanke Enterprise Limited Company, a wholly-owned subsidiary of real estate giant Vanke Group.

The target company, Beijing Guosheng, was newly established by Hainan Airlines in July this year, having an estimated value of 1.739 billion yuan. Its main asset is the Beijing Hainan Airlines Building.

Hainan Airlines is part of HNA Group’s Aviation & Tourism arm. It is not unusual for HNA Group to sell off assets. The Chinese conglomerate sold its original headquarters, Wanghai Science and Technology Plaza, to Sunac China in August.

Meanwhile, Jinjiang International confirmed that it would acquire a 100% stake in the Radisson Hotel Group from HNA Group.

Hainan Airlines Co., Ltd. is an airline headquartered in Haikou, Hainan, People's Republic of China. It is the largest civilian-run air transport company, the fourth-largest airline in terms of fleet size in the People's Republic of China, and tenth-largest airline in Asia in terms of passengers carried.

It operates scheduled domestic and international services on 500 routes from Hainan and nine locations on the mainland, as well as charter services. Its main base is Haikou Meilan International Airport, with a hub at Beijing Capital International Airport and several focus cities.

Hainan Airlines was established in October 1989 as Hainan Province Airlines in Hainan, the largest special economic zone in China. Hainan Province Airlines became China's first joint-stock air-transport company following a restructuring in January 1993 and began scheduled services on 2 May 1993.

The initial 250 million yuan (US$31.25 million) was financed by the Hainan government (5.33%) and the corporate staff (20%). The rest came from institutional shareholders. In 1996, the provincial airline was renamed Hainan Airlines.

American Aviation LLC, controlled by George Soros, had been a major shareholder of the airline since 1995.

Executive-jet operations with a Bombardier Learjet 55 were added in April 1995. In 1998, Hainan Airlines became the first Chinese carrier to own shares in an airport after it purchased 25% stake of Haikou Meilan International Airport.

In 2000, HNA Group was established and became the third largest shareholder (7.31%) of Hainan Airlines. It also controlled Shanxi Airlines, Chang An Airlines and China Xinhua Airlines. By 2003 Hainan, the main airline, overtook Chang'an as the fourth largest airline in China.

In 2007 Grand China Air was established as the new holding company, when American Aviation became its subsidiary.

On 29 September 2005, HNA Group ordered 42 Boeing 787-8s, 10 of which were earmarked for the Hainan Airlines fleet. In January 2006, China Aviation Supplies Import and Export Group Corporation ordered 10 Boeing 737–800s for Hainan Airlines.

In September 2006, Hainan Airlines ordered another 15 Boeing 737-800s.

On 4 December 2007, Hainan Airlines acquired three Airbus A340-600s on lease from International Lease Finance Corporation. On 14 November 2007, Hainan Airlines received its first Airbus A330-200.

In June 2007, Hainan Airlines ordered 13 Airbus A320-200 aircraft. In late 2007, Hainan Airlines ordered 50 Embraer ERJ-145s and 50 Embraer 190s, with a total value at list price of $2.7 billion USD.

The 50-seat ERJ-145s were produced by the Harbin Embraer Aircraft Industry (HEAI) joint venture, located in Harbin. E-190 deliveries began in December 2007. Due to the global financial crisis and huge losses incurred in 2008, the ERJ-145 order was reduced to 25. The E-190 order remained unchanged.

On 25 March 2015, Hainan Airlines announced its intention to acquire 30 Boeing 787-9s, which are all to join the Hainan Airlines Fleet. The delivery of the aircraft is scheduled to be completed by 2021.

Two leased Boeing 787-9 aircraft were delivered in Spring 2016. Hainan Airlines will also be among the first operators of the COMAC C919, with deliveries beginning in the 2020s.

Hainan Airlines and the HNA Group have their headquarters in the HNA Building in Haikou, Hainan with other office premises HNA Tower in focused cities including Beijing, Chongqing, Guangzhou and Shanghai.

It was previously headquartered in the HNA Development Building a.k.a. the Haihang Development Building along Haixiu Road in Haikou.

As of 31 December 2016, Grand China Air is the direct parent company of Hainan Airlines (24.33% shares directly; an additional 1.29% shares via a subsidiary American Aviation LDC), which was partially owned by Hainan Development Holdings (24.97%), HNA Group (23.11%), Starstep (9.57%), Haikou Meilan International Airport (8.30%), Shenhua Group (5.56%) and other shareholders.

HNA Group owned 3.53% shares directly and via Changjiang Leasing, owned an additional 3.08% shares as the second largest shareholder. Haikou Meilan International Airport was the third largest shareholder for 5.13% shares.

Moreover, HNA Group also owned Haikou Meilan International Airport partially, as well as Hainan Airlines as cross ownership. A private equity fund that was managed by Shanghai Pudong Development Bank, owned 4.91% shares as the fourth largest shareholder.

Hainan Airlines operates several self-owned airport lounges at its main hub and focus cities including Beijing (T1 HNA Exclusive Terminal), Haikou, Xi'an, Guangzhou and Urumqi.

In addition, the airline will soon open its exclusive international departure lounge at its main international hub Beijing International Airport Terminal 2. The airline also operates an exclusive Transit Lounge for transferring HNA Group passengers at Beijing Airport Non-restricted area.

Hainan Airlines's frequent-flyer program is called Fortune Wings Club. The airlines's subsidiaries Hong Kong Airlines, Lucky Air, Tianjin Airlines, Beijing Capital Airlines, Fuzhou Airlines and parent company Grand China Air are also parts of the program.

It is also possible for passengers to collect miles on Alaska Airlines, Etihad Airways and the airlines which have codeshares with Hainan Airlines.

Members can earn miles on flights as well as through consumption with Hainan Airlines's credit card. When enough miles are collected, members can be upgraded to Elite members which are divided into four tiers: Fortune Wings Platinum membership, Gold membership, Silver membership, and Flying Card membership. Elite membership get extra services.

Hainan Airlines is one of eleven airlines worldwide rated as five-star by Skytrax, along with All Nippon Airways, Asiana Airlines, Cathay Pacific, Etihad Airways, EVA Air, Garuda Indonesia, Japan Airlines, Lufthansa, Qatar Airways, and Singapore Airlines.

Hainan Airlines operates seven bases across China: Beijing–Capital, Guangzhou, Haikou, Hangzhou, Sanya, Shenzhen and Xi'an. It operates an extensive network across the People's Republic of China, connecting Asia, Europe, North America and Oceania.

It serves nearly 500 domestic and international routes and flies to more than 90 cities.

Hainan operates international regular flights and offers charter flights to 41 various destinations in 21 countries such as flights from Beijing to Almaty, Toronto, Berlin, Brussels, Seattle/Tacoma, St. Petersburg, Moscow, Tel Aviv, Chicago, Las Vegas, San Jose/Silicon Valley and Boston; Beijing, Xi'an, Dalian, Guangzhou, Haikou to Taipei; Beijing, Haikou, Nanning to Bangkok; Hefei via Haikou to Singapore and others.

Hainan also received official approval from the US DOT to begin nonstop flights between Beijing and Chicago. As of June 2014, Hainan began servicing Boston directly with a four-times-weekly 787 flight from Beijing Capital International Airport.

It was the first direct flight between Boston and China. The airline began service in the second quarter of 2013 with the Boeing 787 Dreamliner aircraft. It was the first Chinese carrier to offer flights between the two cities. Flights from Beijing-Capital to Chicago-O'Hare began on 3 September 2013.

On 23 October 2015, Hainan announced flights to Manchester, United Kingdom, starting in summer 2016. Hainan announced the launch of a direct route between Beijing and Calgary, Canada, as of 30 June 2016.

During the second half of 2017, Hainan Airlines began flights from Shanghai to Tel Aviv and restarted flights from Shanghai to Brussels. In late September 2017 Hainan Airlines commenced direct flights to and from Brisbane, Australia, several times per week, and also to Belgrade, Serbia, via Prague, every Monday and Friday.

On 8 March 2018, Hainan Airlines announced flights between Changsha and London Heathrow, commencing 23 March 2018 and on 15 March 2018, they announced round trip flights between Beijing–Capital, Dublin, and Edinburgh commencing 12 June 2018

Hainan Airlines codeshares with the following airlines:

- Aegean Airlines

- Aigle Azur

- Air Serbia

- Alitalia

- Alaska Airlines

- American Airlines

- Azul Brazilian Airlines

- Beijing Capital Airlines

- Brussels Airlines

- Czech Airlines

- Etihad Airways

- EVA Air

- Grand China Air

- GX Airlines

- Hong Kong Airlines

- Korean Air

- S7 Airlines

- Suparna Airlines

- Tianjin Airlines

- Uni Air

- WestJet

- Virgin Australia

Hainan Airlines fleet consists of the following aircraft:

- Airbus A330-200: 09 Aircrafts

- Airbus A330-300: 20 Aircrafts

- Airbus A350-900: 02 Aircrafts

- Boeing 737-700: 02 Aircrafts

- Boeing 737-800: 155 Aircrafts

- Boeing 737 MAX 8: 10 Aircrafts

- Boeing 787-8: 10 Aircrafts

- Boeing 787-9: 25 Aircrafts

- Total: 233: Aircrafts

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