China's HNA buys stake in Virgin Australia

GMT 08:14 2016 Tuesday ,31 May

Arab Today, arab today China's HNA buys stake in Virgin Australia

China's HNA will pay Aus$159 million
Sydney - AFP

Chinese aviation and tourism giant HNA is buying a 13 percent stake in Virgin Australia, the airline said Tuesday, just a week after the Hainan company scooped up part of Portuguese national airline TAP.

HNA, led by Chinese billionaire Chen Feng and best known as the parent of Hainan Airlines, will pay Aus$159 million (US$115 million) for its share in the carrier, the Australian firm said in a statement.

The Chinese conglomerate has made a spate of acquisitions in recent years as it tries to capitalise on Asia's blossoming air travel business and last week purchased up to 20 percent of TAP.

In April, HNA announced it would buy US-based Carlson Hotels, owner of the Radisson brand.

Virgin Australia, the second-largest airline in the country, said the tie-up would boost its access to the "rapidly growing Chinese travel market" and the two companies would consider introducing direct flights between Australia and China.

The carrier's shares closed 7.14 percent higher to 30 Aus cents in Sydney on Tuesday.

"The Chinese travel market represents Australia's fastest growing and most valuable inbound travel market, with inbound passengers from China increasing by approximately 18 percent per year since 2010," Virgin Australia's chief executive John Borghetti said.

The deal with HNA comes several months after Air New Zealand, Virgin Australia's largest shareholder, said it may sell its 26 percent stake in the airline.

Other major shareholders in Virgin Australia include Etihad Airways, Singapore Airlines and Virgin Group.

The alliance is subject to Australian and Chinese regulatory approvals.

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