The Civil Aviation Administration of China has asked HNA Group Co.’s airline businesses to pay overdue bills, including amounts owed for jet fuel and airport fees, according to a person with direct knowledge of the matter.
Authorities from the nation’s air-safety regulator have met with executives of the conglomerate to push for the payments, the person said, asking not to be identified because the discussions were private. The regulator has refrained from further actions to avoid disruptions to flight operations and inconvenience to passengers, the person said.
Representatives for Hainan Airlines and HNA Group couldn’t immediately comment.
Some HNA-backed carriers have pending bills with South China Bluesky Aviation Oil Co., a subsidiary of state-owned China National Aviation Fuel Group and the parties are still in talks to resolve the issue, a spokesman for the parent said Thursday. CNAF didn’t provide details.
Haikou, Hainan-based HNA Group is in the midst of more than $10 billion in asset sales after a debt-fueled acquisition spree to snap up everything from Manhattan buildings to a stake in Deutsche Bank AG in the past few years strained its finances. The group is said to have targeted 100 billion yuan ($16 billion) in asset disposals by the first half of the year to ease financial pressures.
Earlier this month, Mingtiandi reported that the group’s flagship Hainan Airlines Holding Co. received an ultimatum from Bluesky to pay all the arrears by 4 p.m., March 16 or have deliveries cut off two days later. The news site said the airline has been missing payments since October but didn’t specify how much Hainan Air owes. Reuters reported last month HNA’s overdue bills from CNAF had climbed to 3 billion yuan.
Shares of Hainan Air have been suspended from trading since January, pending the disclosure of a restructuring plan. It’s one of seven HNA units whose shares have been halted from trading for months.
HNA said in February that it was in a “very healthy” financial position. Founded in 1993 as a regional airline operator, with George Soros as an early investor, the group says it’s created 410,000 jobs worldwide and built up assets of about $180 billion.
