Air services provider HNA Group is planning to convert the economic crisis into an opportunity for its logistics business, according to its chairman.

"The financial crisis is reshaping the logistics landscape and this is the right time for us to build up the business," said Chen Feng, HNA chairman.

HNA, the parent of Hainan Airlines, said it has already made a beginning in this regard by floating Grand China Logistics Group, China's first aero-amphibious logistics provider.

The Shanghai-based group, with a registered capital of 1 billion yuan and assets of 5 billion yuan, has 11 subsidiaries in shipping, air and road logistics, and dock management, and plans to provide door-to-door logistics services globally.

"We are planning to make Grand China a world-level integrated logistics company within nine years," said Jia Hongxiang, executive board chairman and president of Grand China Logistics.

"Acquisition and facility costs have been affected by the financial crisis. The falling fuel prices is also helping us in developing the logistics business," said Jia.

According to Chen, the logistics business accounts for 10 to 15 percent of the total business of HNA Group.

"The sector is growing rapidly and we expect logistics to account for nearly 15 to 20 percent of our whole business this year," Chen said.

HNA Group, with total assets of 80 billion yuan, earned revenue of 30 billion yuan last year, up 24 percent from 2007.

It compared to an industry increase of 3 percent last year, according to Chen.

The group started its cargo business in 2004 by establishing Yangtze River Express Airlines Co Ltd, an air cargo company with the largest freight air fleet in China.

Last year, HNA acquired 29.98 percent of shares in Tianjin Marine Shipping Co Ltd and around 95 percent stake in Shandong Yantai International Marine Shipping Co Ltd.

(China Daily March 18, 2009)