HNA Group buys 48% stake in French airline
HNA Group, the parent company of Hainan Airlines Co Ltd and China's fourth-largest airline group, completed its acquisition of a 48 percent stake in Aigle Azur, a Paris-based private airline, as HNA expands its international flight network, the group announced on Tuesday.
The French airline also will open its route from Paris to Beijing in the summer of 2013.
It marks the first time that a Chinese airline company has invested in a European airline. HNA Group will be the second-largest shareholder in the airline, after Go Fast Group in France.
But the two sides refused to reveal the amount of the deal, which once was reported at $40 million.
According to the agreement, Aigle Azur will be governed by an executive committee composed of five representatives, two of which will be named by HNA Group. In addition, HNA will assign an executive member to be the vice-president and appoint a deputy chief financial officer.
Aigle Azur, founded in 1946, runs domestic passenger services in France and international services to Portugal, Italy and Mali. It also operates charter, cargo and wet-lease services.
The deal will also allow Aigle Azur to introduce two A330 wide-body aircraft.
HNA Group board member Tan Xiangdong said the cooperation with Go Fast and the investment in Aigle Azur is a milestone in HNA's overseas expansion, and demonstrates successful cooperation between Chinese and French companies.
The deal will increase the number of incoming tourists to France and create more jobs locally. The partnership will also allow Aigle Azur to enjoy HNA's annual passenger transport of 3.5 million people, Tan added.
Aigle Azur President Arezki Idjerouidene said the cooperation with China's fourth-largest airline company is a turning point for Aigle Azur.
"We hope to grow and develop together with HNA," he said, adding that the basis for a successful partnership with HNA is the similarity in the businesses of the two companies and the view they share on the prospects of the aviation industry.
The economic recession in the West has created difficulties for the aviation industry, but HNA is still positive about Aigle Azur's prospects.
"Aigle Azur is a well-operated company and it managed to make a profit even during the financial crisis," Tan said.
"We think investing in Aigle Azur is a well thought-out decision of HNA," he added.
Tan said the deal will help HNA extend its international flight network, especially its business to Europe and Africa.
Aigle Azur, which also has routes to Algeria, Morocco and Tunisia, will open routes from Paris to Beijing and other destinations.
International expansion has been a major focus of HNA Group during the last two years, and the group is also looking at some niche markets, such as Africa.
The group invested in Ghana-based Africa World Airlines Ltd, which launched its first flight in September. The new airline will become the group's basis to expand its business in Africa.
Tan said HNA will continue to seek overseas acquisition opportunities after the deal with Aigle Azur.