Conglomerate HNA Group is in the process of reducing its shares from LCC Guangxi Beibu Gulf Airlines (GX Airlines) as part of the airline’s restructuring plans. Guangxi Beibu Gulf Investment Group, HNA Group and Guangxi Airport Management Group signed a framework agreement on June 11 to initiate the move. 

HNA subsidiary Tianjin Airlines currently holds 70% share of GX Airlines, with the rest belonging to the state-owned Guangxi Beitou Civil Aviation Investment Co. The restructure will see Guangxi Beibu Gulf Investment taking the lion’s share of 71.2%, HNA Group 24% and 4% to Guangxi Airport Management Group. HNA will still be responsible for flight operations and marketing of the airline. 

Following the equity restructure, the airline’s board of directors will also be adjusted according to the share ratio and respective company laws.

This would be HNA’s third transfer of its airline equity to local government entities, following Urumqi Air and Beijing Capital Airlines.

GX Airlines is HNA Group’s better performing carrier; in 2018 the LCC achieved an operating income of CNY2.4 billion ($349 million) and net profit of CNY7.4 million. The carrier currently operates 11 Airbus A320s and 17 Embraer ERJ190s, to around 60 domestic and international routes.  

Aviation analyst, Lin Zhijie told China’s Daily Economic News that the move to sell shares to the local government not only would help HNA in solving its cash flow issues, but also introduce new shareholders while still retaining management rights and influence on its subsidiaries.

Chen Chuanren, chuanren@purplelightvisuals.com