HNA takes 49pc stake in Turkish airline ACT
The Hainan-based HNA Group, the fourth-largest airline group in mainland China, has acquired a 49 per cent stake in a Turkish cargo airline as part of its efforts to strengthen its foothold in Europe.
Istanbul-based ACT Airlines started as a charter cargo operator in 2004, followed by a financial and management restructuring in 2006, when two Turkish investors and a US-based hedge fund, HBK Investments, bought into the financially struggling business.
HNA Group is investing US$25 million for the 49 per cent stake in ACT, and will expand the Turkish operator's fleet to 10 aircraft in the next two years, according to the website of the Ministry of Commerce. ACT operates six Airbus 300 B4 freighters and serves DHL, Lufthansa and Turkey's defence ministry.
The acquisition follows another Turkey deal in November, when HNA bought a 60 per cent stake in myTECHNIC, an aircraft maintenance, repair and overhaul service provider, for US$30 million.
More acquisitions in Europe are also planned.
HNA chairman Chen Feng said last week that the company was at the final stage of bidding for Hochtief Airport in Germany.
It is also planning a joint venture in Hungary with state-owned Malev Hungarian Airlines, according to aviation sources.
Chinese airlines face increasing competition from domestic high-speed railways. Developing international routes and businesses is becoming the favoured strategy to make up for lost passengers at home.
However, European routes come with their own problems as a result of the emissions trading scheme proposed by the European Union that takes effect from next year.
Chinese carriers made a combined profit of 12.78 billion yuan (HK$15.39 billion), up 26 per cent from a year earlier. However, the cargo business was weak.
The amount, in US dollars, that HNA Group is investing in Turkish cargo airline ACT. It will expand the fleet to 10 aircraft in two years