By XUE Bingbing
HNA Group (HNAG), the aviation business spun off from HNA Holdings two years ago, on Friday marked two years under the ownership of Liaoning Fangda.
In 2021, heavy-industry powerhouse Liaoning Fangda acquired HNA Holdings’ aviation division. A year before, HNA Holdings had incurred a staggering loss of 64 billion yuan (US$9 billion), the largest single-company annual loss in A-share history.
In 2022, the first full year under Fangda’s control, operations stabilized, or at least as much as could be expected in a turbulent aviation industry facing the triple headwinds of the pandemic, oil prices, and exchange rates
As the industry began to recover, in January 2023, HNAG made a profit, the first in nearly five years, and excluding exchange rate fluctuations, has sustained overall profit from January to October.
The improvement is down to new strategies, controlling expenses, and generating profits.
Before bankruptcy restructuring, HNAG possessed a large number of wide-body aircraft, leading to excess capacity and underutilized resources. The problem was addressed through early lease returns, sales and disposals, and by accelerating the introduction of narrow-body aircraft.
One of the significant reforms in 2023 is the full-service transformation.
Starting in June, HNAG’s various subsidiary airlines including Hianan Airlines, began the transformation to full service. Initially, this involved reintroducing basic services such as meals and baggage check-in.
Since the transformation, passenger satisfaction rates steadily increased.
Before bankruptcy restructuring, HNAG managed its subsidiaries through a three-tier structure with funds allocated centrally by HNAG. After Fangda took over, the management of subsidiaries was decentralized and devolved.
Despite changing hands two years ago, completely shedding the baggage of the past is not an overnight task for HNAG which still faces historical challenges in the management of its subsidiaries.
