A decision by creditors of Chinese conglomerate HNA Group to apply for bankruptcy proceedings could impact the 737-800 market as almost a third of the total fleet is operated by the 14 Chinese airlines within the group.
The Hainan-based company says in a statement that it received a notice issued by the Hainan Provincial Higher People’s Court in which relevant creditors applied for bankruptcy and reorganisation because the group could not pay off its debts.
“Our group will cooperate with the court to conduct judicial review in accordance with the law, actively promote debt disposal, and support the court to protect the legal rights and interests of creditors in accordance with the law to ensure the smooth progress of production and operation of the enterprise,” says HNA.
The 737-800 is the asset class most exposed to the group with an estimated 202 units, according to Airfinance Journal’s Fleet. Another 43 aircraft are 737-700 models.
The A320 models account for 129 aircraft, including 31 A320neos. Another 27 are A321 and A321neo models.
One the widebody side the A330-300 model is the most exposed aircraft to the group with 35 units. There are also 21 A330-200s in operation as well as nine A350-900s, according to the data.
The Chinese carriers also operate 30 787-9s and 10 787-8s, Fleet Tracker shows.
Embraer models are also exposed. The data shows 79 aircraft, including 50 E190s and 29 E195s.
As well as Hainan Airlines, HNA Group has control of 13 further airlines with a global fleet of an estimated 650 aircraft in operations.
HNA Group owns HNA Aviation, which is affiliated with multiple airlines in China: Air Chang’an, Beijing Capital Airlines, Fuzhou Airlines, Grand China Air, GX Airlines, Hainan Airlines, Lucky Air, Suparna Airlines, Tianjin Airlines, Urumqi Air and West Air.
The top three leasing companies exposed to HNA include GECAS with 42 units, following by Bocomm Leasing with and Avolon.
Orix Aviation bought a 30% stake in Avolon in 2018 for $2.2 billion, while HNA's Shenzhen-listed unit Bohai Leasing retained the remaining 70%.
Chinese leasing companies represent 27% of the group of airlines total exposure, according to Fleet Tracker. Other lessors account for 25% of the fleet while the remaining of the fleet is under financial institution financing or owned by carriers.