HNA Group, the parent firm of Hainan Airlines, is in talks to
buy a stake in Hong Kong Express Airways Ltd, a local regional
carrier.
The move follows HNA's negotiation to control another Hong Kong
airline, CR Airways, and is expected to boost HNA's international
expansion via Hong Kong.
"We are still in negotiation about the actual form of the
partnership with Hong Kong Express," Hu Jie, Hainan Airlines'
executive vice-president, told China Daily yesterday.
A report in Hong Kong-based newspaper Ta Kung Pao said HNA, the
mainland's fourth-largest aviation group in terms of sales, is
going to buy 45 percent of Hong Kong Express. Glenn Yuen, Hong Kong
Express' sales manager for Greater China, released the information
when the airline launched a new service from Hong Kong to Chongqing
on Tuesday.
Hong Kong Express was formerly known as Helicopters Hong Kong
Ltd. It was founded in 1997 and used to provide regular helicopter
services between Hong Kong, Macao and the Pearl River Delta
region.
The company was renamed Hong Kong Express early last year to
launch a jet service. It was approved in May last year to operate
scheduled jet air services from Hong Kong to five Chinese mainland
cities Guangzhou, Hangzhou, Chongqing, Nanjing and Ningbo.
The small carrier now operates four leased Embraer 170 aircraft.
But it plans to add two aircraft annually over the next few years
to fly to other Asian destinations, according to the company's
website.
Analysts said that HNA, by buying into two Hong Kong carriers,
wants to get a foothold in Hong Kong to launch more international
services via the special administrative region.
"Hainan Airlines' international network is the weakest of all
mainland carriers. If it holds large shares in local Hong Kong
carriers, it could indirectly benefit from these carriers' future
applications for more international flights from Hong Kong," said
Li Lei, an aviation analyst with Beijing-based CITIC
Securities.
The partnership could also complement Hainan Airlines' flight
network between Hong Kong and the mainland.
"Obviously Cathay's takeover of Dragonair and cross shareholding
with Air China has put great pressure on other mainland carriers,"
Li said.
Hong Kong's largest carrier Cathay Pacific in June took over
Dragonair, which operates the most flights between Hong Kong and
the mainland. It also raised its stake in Air China from 10 percent
to 20 percent. Air China bought 10.2 percent of Cathay-Pacific.
HNA was reportedly in talks at the end of last year to take a
controlling stake in CR Airways. HNA would buy 60 percent of the
Hong Kong regional carrier by swapping shares in Xinhua Airlines
Ltd, 60 percent-owned by HNA.
But Hainan Airlines' Hu yesterday said that details about the
deal had not been finalized yet.
CR Airways was founded in 2001 and operates routes from Hong
Kong to cities such as Nanning, Guilin, Kunming, Jinan and
Haikou.
Hainan Airlines last month launched the first direct air service
linking China and Belgium. It also flies to Bangkok, Kuala Lumpur,
Osaka and Budapest.
(China Daily August 3, 2006)