HNA Group affiliates gobble up Hong Kong-based assets

Hong Kong Airlines recently acquired a 51% stake in SATS HK, the Hong Kong affiliate of Singapore-based airport services provider, SATS. In parallel, Hong Kong Airlines’ investment arm, Holistic Capital Investment, acquired a 35% stake in Asia Air Freight Terminal (AAT) (a stake that was owned by forwarder and logistics services provider, Kerry Logistics, SATS HK and Singapore-based Keppel Telecommunications & Transportation) SATS HK meanwhile, maintains a 45% stake in AAT.

Investing in a freight terminal on a carrier’s home turf can be a sensible decision, especially if that turf is Hong Kong, but the more intriguing element of this acquisition has far less to do with Hong Kong Airlines than it does with HKA’s parent, Hainan-based HNA Group.

Combination carrier Hong Kong Airlines, controls significant air freight capacity across its fleet of widebody passenger jets, and a freighter fleet consisting of five A330-200Fs, which have now appear to have been transferred to its standalone all-cargo affiliate, Hong Kong Air Cargo. In 2015, Hong Kong Airlines registered Hong Kong Air Cargo, but only recently has the airline commenced operations. According to the cargo startup’s social media page, “The company plans to provide all-cargo services with new Airbus A330-200F aircraft between Hong Kong and major cities of the world.” Hong Kong Air Cargo’s website, www.hkaircargo.com adds only, “The network covers Hong Kong and other cities in China and Asia.” Hong Kong Airlines’ capacity is expected to grow in the coming years as the carrier takes delivery of ten A350s.

New freighters are also potentially in the cards (or not). In June 2011, the carrier placed an order with Boeing for six 777Fs. This order was later transferred to an HNA Group leasing affiliate, Hong Kong International Aviation, and later deferred. The fate of this six-unit order is still unknown, but the permutations are endless. Might they end up in the fleets of Hong Kong Air Cargo or Yangtze River Express?

Although an indirect investment, HNA’s stake in AAT represents the group’s second high-profile airport acquisition in 2017. In January, HNA acquired an 82.5% stake in Hahn Airport from the German state of Rhineland-Palatinate (see HNA Group buys Hahn Airport). Little has changed since the airport, located on the outskirts of Frankfurt, was acquired. Etihad Airways, Nippon Cargo Airlines, Silk Way West, and Yangtze River Airlines all operate freighters at HHN, and HNA is said to be in the process of adding three new weekly freighter frequencies. As HNA Group companies expand their presence at Hong Kong international, Cargo Facts would not be surprised to see new freighter flights from other HNA subsidiary carriers as well.

Returning to the AAT deal, Hong-Kong based forwarder Kerry Logistics said it was abandoning its 15% stake in the terminal to free-up capital for future acquisitions. Kerry already maintains a robust network in Northern and Southeastern Asia. New expansions, however, will target the Commonwealth of Independent States (CIS), much in line with China’s One Belt, One Road initiative, which aims to enhance connectivity between China and Europe. Kerry has said it will acquire a Dubai-based forwarder with a strong focus on the CIS region in May, but has not yet named that forwarder.

Those interested in learning more about how China’s “One Belt, One Road” initiative will impact airfreight, should join us at Cargo Facts Asia in Shanghai (25 – 26 April) where senior executives from AirBridgeCargo, Kuehne + Nagel and Silk Way Airlines will address a panel on the subject.   To register, or for more information, go to CargoFactsAsia.com