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HNA Aviation carriers late on lease payments
December 8th 2017
Could HNA Aviation be a castle made of sand after all? Airfinance Journal, citing lessor sources, has reported HNA Aviation carriers are consistently paying late for aircraft they have leased. Read More »
Five lessors have confirmed they are affected. One company told the journal one HNA airline was “technically in default” as lease payments were “significantly past the due date”.
HNA sources aircraft from AerCap, Aircastle, Aergo Capital, Air Lease Corp., ALAFCO, Apollo Aviation, Aviation Capital, Avolon, BBAM, BOC Aviation, Bocom Leasing, CCB Leasing, CDB Leasing, CALC, DAE Capital, ECC Leasing, Everbright Financial Leasing, GECAS, Goshawk, Hong Kong International Aviation Leasing, ICBC Leasing, Jackson Square Aviation, KKR DVB Aviation Capital, Macquarie AirFinance, Magnetar Capital, Merx Aviation, Minsheng Financial Leasing, Orix Aviation, Skyco Leasing, SKY Leasing, SMBC Aviation Capital and Sojitz Aircraft Leasing.
HNA Aviation is made up of Hainan Airlines, Air Chang’an, Beijing Capital Airlines, Fuzhou Airlines, Lucky Air, Tianjin Airlines, Guangxi Beibu Gulf Airlines, West Air and Urumqi Air, as well as Hong Kong-headquartered Hong Kong Airlines and HK Express.
According to the report, HNA paid its dues for Hainan Airlines, Hong Kong Airlines and HK Express on time, but the conglomerate is reportedly struggling to settle leasing fees for its smaller subsidiaries. A Mainland leasing firm with exposure to Lucky Air said to AirFinance Journal: “Not only Lucky. Most of the HNA affiliates have some problems”.
Another lessor, who was not identified, said: “It feels like the whole situation of HNA is getting to a really critical point”, but noted the issue appeared to be with the parent company and not individual carriers.
This was corroborated by a third lessor source who said the airlines seemed to be turning profits, but that the parent was “over-extended”.
HNA Group is being investigated in Germany, where authorities are deciding if HNA inaccurately reported its holdings when it acquired 9.9% of Deutsche Bank. In Switzerland, HNA Group has been accused of providing false information in its takeover of Gategroup Holding.
HNA CEO, Adam Tan, recently said the group was considering selling parts of the more than US$40 billion in foreign assets acquired by the conglomerate since 2016, which would improve the group’s liquidity and cash flow.
