Hainan Airlines, hit by Covid-19 and HNA Group restructuring, posts biggest-ever annual loss for a listed Chinese company
- Haikou-based carrier reports a loss of US$9.9 billion for 2020
- Airline unprofitable this year too, reports first-quarter loss of 2.6 billion yuan
Hainan Airlines Holding, the aviation unit of debt-laden Chinese conglomerate HNA Group, has posted the biggest-ever annual loss among listed Chinese companies.
Hainan Airlines was the foundation on which magnate Chen Feng built his conglomerate, which spanned hotels to financial institutions. With money earned by the carrier and bank loans, Chen splurged on overseas acquisitions, buying up stakes in the likes of Hilton Hotels and Resorts, Deutsche Bank and Ingram Micro. The binge grounded to a halt in 2017, when Beijing started to crack down on purchases of overseas assets in a deleveraging campaign aimed at defusing financial risks.
Hainan Airlines’ revenue dropped 59 per cent from a year earlier, with sales from its aviation operations slumping by 62 per cent, according to its annual results. While its passenger load fell by 55 per cent, its cargo flights declined by 47 per cent.
Shares of the carrier rose 3.1 per cent to 1.67 yuan in Shanghai on Friday. The daily trading band for the stock is restricted to 5 per cent by the exchange, as opposed to the 10 per cent band for other companies, because of the financial risk attached to it. The airline has lost 75 per cent of its market value from a record high in 2015.