Hainan Airlines eyes more overseas investment

BEIJING -- Hainan Airlines Group, owner of China's fourth largest carrier by fleet size, plans to buy stakes in more overseas airline companies, the company's board chairman Chen Feng said Friday.

The group has plans for more overseas acquisitions and is just at the beginning of its internationalization process, Chen told reporters at a news conference on the sidelines of the 18th National Congress of the Communist Party of China.

File photo of a customer buying airplane tickets at a ticket counter of Hainan Airlines Group in Haikou, Hainan province. [Shi Yan/Asianewsphoto]

He refused to disclose whether some investment talks are under way.

The parent company of Hainan Airlines, the HNA Group announced last month it had acquired a 48-percent stake in French airline Aigle Azur, becoming the French carrier's second-largest shareholder following the GoFast Group.

"There are a lot of Chinese people visiting Europe, and Paris is a big transportation hub there," Chen said. "We want to enter the market and the only way is through mergers."

The HNA Group is estimated to see revenues exceed 100 billion yuan ($15.9 billion) this year and aims to boost the revenues to between 600 billion yuan and 1 trillion yuan as China's economy continues to grow, Chen said, without revealing the planned date to achieve the goal.

However, the group won't place too many orders for planes next year while its subsidiary Hong Kong Airlines is negotiating with Airbus on canceling a previous order of ten A380 aircraft due to the flagging global aviation market, said the chairman.

"The world economic downturn may last for a long time and we have to be prepared to tackle it," he said.

He also implied that Hong Kong Airlines is unlikely to go public in Hong Kong in the near future, citing weak investment sentiment in aviation stocks.

The HNA Group's revenues were nearly 100 billion yuan last year, with about 300 billion yuan in assets at the end of last year, according to the company's financial statements.

Chen said the group is in good shape in terms of cash flow and debt solvency, though its shipping business has been hit by weak demand as a result of the global economic downturn.

The group has canceled some ship leasing contracts as the international shipping market is "upside down and too miserable to look at", he said.