VIRGIN RAISES $159M IN AIRLINE DEAL WITH HNA GROUP

VIRGIN RAISES $159M IN AIRLINE DEAL WITH HNA GROUP

VIRGIN Australia Holdings (ASX: VAH) and China's HNA Aviation Group have inked a new commercial alliance to bolster the carrier's presence within the Chinese travel market.

HNA will make a $159 million equity investment in Virgin Australia in the form of new shares as part of the agreement.

The placement will be issued to subsidiary HNA Innovation for 30 cents apiece, which will boost HNA's total stake in the company to about 13 per cent.

As the airline continues to review its capital structure, HNA has signalled intentions to increase its shareholding to 20 per cent over time.

The Chinese aviation powerhouse will also be nominating a director to the Virgin Australia board under the agreement.

The companies will work to establish direct flights between Australia and China, as well as cooperate on commercial functions including code-sharing, frequent flyer programs, lounge access and promotion of tourism and business travel.

Virgin Australia CEO John Borghetti says the company will invest further into the key market by making the most of its new company ties. 

"We are pleased to welcome HNA as a new shareholder and strategic alliance partner," says Borghetti.

"The alliance will see us leverage the opportunities offered by China as well as the synergies of HNA's comprehensive aviation supply chain."

According to Borghetti, China represents Australia's most valuable inbound travel market, with the total number of inbound passengers increasing by approximately 18 per cent per year since 2010.

The new alliance will be subject to ACCC authorisation, regulatory approvals from Chinese authorities and other commercial conditions before being finalised.

 

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

How communications technology can raise the bar on customer service, employee experience
Partner Content
From capturing feedback early to providing messages with a higher rate of cut-through, ...
Advertisement

Related Stories

EML Payments awarded $320m government contract to help stimulate the Spanish arts sector

EML Payments awarded $320m government contract to help stimulate the Spanish arts sector

Global payment solutions business EML Payments (ASX: EML) will play...

Microbio goes public as med-tech tackles condition that causes 11 million deaths per year

Microbio goes public as med-tech tackles condition that causes 11 million deaths per year

Brisbane-based medical technology company Microbio has stepped...

Available anywhere and everywhere: Lifestyle brand The Somewhere Co. targets global expansion

Available anywhere and everywhere: Lifestyle brand The Somewhere Co. targets global expansion

Despite a difficult few months for everyday wares outfit The Somewh...

G'day space: Australia is "go" for launch

G'day space: Australia is "go" for launch

Just after midnight on Monday 27 June, above the vast wilderness of...