HNA Group Owes Airbus $1 Billion — and Won't Get New Planes Until It Pays
Between the unveiling of its newest aircraft type, the A220, and the announcement of JetBlue's massive order for the new plane, it's been a big week for Airbus. Journalists from around the world, including TPG's own JT Genter, were at Airbus' delivery center in Toulouse, France for a ceremony to present the new jet — but the A220 wasn't the only aircraft that caught their eyes.
Reuters reports that there were at least six A330s painted in the flame-red liveries of HNA Group airlines parked at the delivery center. The reason? Airlines affiliated with the HNA Group have delayed payments for the new planes for several months, and rather than stepping in to finance the aircraft, Airbus is holding back on deliveries.
TPG’s JT Genter spotted an A330-300 (registered F-WWCK) painted with Hainan Airlines’ livery and another A330 with the Beijing Capital Airlines' livery parked at the center, but neither were on the delivery schedule displayed on monitors inside.
"After six months of talks, Airbus took the decision to withdraw the planes as it does not want to play the financier," said a person familiar with the discussions, according to the report. Another person involved in the matter claimed: "It is in the process of being resolved."
While the total value of the six undelivered A330s is well over $1 billion, the financial burden of holding such an asset, in terms of lost value and the cost of storage and maintenance, is estimated at $10,000 per plane, per day.
The HNA Group is a massive Chinese conglomerate with significant stakes in the aviation, hotel and tourism sectors. Member airlines include Hong Kong Airlines, Beijing Capital Airlines and most notably, the only Chinese carrier to receive a five star rating from Skytrax, Hainan Airlines — all of which are already heavy Airbus operators. The company has built up a large amount of debt over the years and recently sold some of its assets, including a 26.1% stake in Hilton.
Airbus issued the following statement when we reached out for comment: “Any talks with customers or contractual arrangements are confidential.” The HNA Group did not immediately respond to TPG’s request for comment.