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There’s an old joke: How do you build a USD 100 million airline? Start off with a USD 1 billion airline.
Under founding Chairman Chen Feng, HNA Group Co. appears to have gone in the opposite direction. From its first flight in 1993, through a USD 25 million investment from George Soros in 1995 and a 2000 restructuring, the former Hainan Airlines has never stopped growing.
In December last year, gross assets of the aviation-focused conglomerate already amounted to 468.7 billion yuan (USD 67 billion) — more than any U.S. carrier, and greater than the combined assets of Europe’s market leaders Deutsche Lufthansa AG and International Consolidated Airlines Group SA. Then in 2016, things really got going.
On Jan. 8, it completed its then-biggest acquisition, the USD 2.5 billion takeover of Irish aircraft lessor Avolon Holdings Ltd. A month later, it paid USD 6 billion for Ingram Micro Inc., the world’s biggest electronics distributor, and completed the USD 2.8 billion purchase of ground cargo handling company Swissport Group. In October, HNA paid USD 10 billion for another lessor, CIT Commercial Air, and spent USD 6.5 billion on a quarter of the Hilton Worldwide Holdings Inc. hotel chain.
Throw in smaller deals and the tally for 2016 should put gross asset value easily over USD 100 billion. That would be enough, were the closely held HNA listed, to make it one of the world’s 100 biggest non-financial companies — larger than Boeing Co., Walt Disney Co. or Coca-Cola Co.
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