HNA Group's Aviation Industry Companies Expand the Global Market Together

As the travel demands between Western China and the US keep growing, Hainan Airlines recently begins two new routes between New York's John F. Kennedy International Airport (JFK) and the Chinese cities of Chengdu and Chongqing. Apart from opening flight routes, HNA Group has conducted several strategic investments during these years, which also contribute to its expansion in the aviation sector globally.

Enhancing Communications between China and the US

The new services to Chongqing commence on October 21 and to Chengdu on October 27 from JFK's Terminal 4. Each route will operate twice weekly on Hainan Airline's fleet of Boeing 787-8 Dreamliner aircraft. It is the only non-stop service offered between New York City and China's rapidly growing Sichuan province.

Before these two new routes, Hainan Airlines had opened the Changsha-Los Angeles route in 2016, the Chengdu-Los Angeles and Chongqing-Los Angeles routes in 2017. Thus, passengers can travel between Los Angeles or New York and three main cities in Southwest China, Changsha, Chengdu and Chongqing, with no need for a connection in a transit city. The new route is expected to significantly reduce the travel time, enhancing exchanges and collaborations concerning culture, the economy, and politics between the two countries.

The increasing economics and trade exchanges between US and China lead to the growth of aviation markets between the two countries. According to statistics from the US Department of Commerce, from January to August in 2017, bilateral trading between China and the US reached $ 3995.4 billion, and China is the largest trade partner of US. According to statistics from the National Travel and Tourism Office, 2016 saw almost 3,000,000 Chinese tourists enter the USA (an increase of 466% since 2009). The total Travel and Tourism Exports for the year was more than $32 billion.

Connecting the US to China is a core element of HNA Group's strategy, supporting increased capacity and expanding cultural exchanges between the two nations. Seattle was Hainan Airlines' first North American destination. On 9 June 2008, at precisely 16:20, Hainan Airlines' first route to North America departed Terminal 2 of Beijing Capital International Airport. This direct route from Beijing to Seattle was the fastest among Sino-US routes, taking only 11 hours to complete, some five hours less than normal. Initially, Hainan Airlines operated this route four times per week, but it has since become a daily flight, with a Shanghai Pudong-Seattle route added in 2015. In 2014, Hainan Airlines opened up a Beijing-Boston route, still the only direct flight between the two cities. Hainan Airlines also has exclusive direct flights from Beijing to San Jose, Calgary and Las Vegas. With 14 routes connecting nine cities of China and the US, Hainan Airlines is now offering the largest number of flight routes between the two nations among Chinese airlines.

Collaborations of Aviation Industry Companies

Apart from opening flight routes, HNA Group has conducted several strategic investments that focused on the aviation sector these years. The collaborations between HNA Group's aviation industry subsidiaries contribute to its expansion globally.

The new Chongqing-New York and Chengdu-New York routes are both served by Swissport, the world's largest provider of ground and cargo handling services in the aviation industry, and Gategroup, a leading global provider of products, services and solutions related to a passenger's onboard experience. Swissport provides ground handling services, while Gategroup prepares the specially designed cabin food menu with Sichuan flavor for the new routes.

HNA Group acquired Swissport in 2015 and Gategroup joined HNA in 2016. They both have good development in the US. With a workforce of around 17,000 personnel, Swissport is active at 65 airports across the US. It provides services on behalf of more than 200 client-companies and handles around 2 million flights (movements) per year. The company operates around 26 warehouses and moves approx. 1.5 million tonnes of cargo. Having 10,878 employees and over 30 airline catering facilities across 19 states in the US, Gategroup serves over 1.5 million flights annually for approx. 150 customers, including all major US airlines and most leading international airlines.

Mr. Dany Nasr, CEO of Swissport USA, said, "The cooperation between HNA and Swissport brings more opportunities for both sides. For Swissport, HNA brings access to the Asian markets, and also to all the flights of HNA family. With the support of HNA, we believe we have very good chance to achieve our goals. The portfolio of HNA companies, including Gategroup, Swissport and the rest of its business, enhances its center of expertise in the aviation industry. And I think it's good to be able to help each other, exchange best practices, and have the opportunities to talk about what's the best way forward for our business."

Herman Ambeek, President of Gategroup Americas and EMEA, said, "Since Gategroup joined the HNA family in 2016, we are trying to contribute to each other. Our catering business, business model, global brand and best operational practices are the key reasons that HNA was interested in acquiring us. And for us, HNA's knowhow and expertise in aviation industry will be a benefit. We are already searching for new business opportunities with HNA family; one successful case is being able to serve Hainan Airlines for the new routes. We are working together also with HNA's hotel and railway service sectors to explore further development. Apart from these, HNA brings us the first class access to APAC/China markets, which is very important for us to further expand our footprint globally." After joining HNA family, Gategroup's financial performance for the year 2016 improved substantially across all areas. Total revenue increased 12.2% to CHF 3,363.1 million.

Besides the strategic collaboration, both companies develop their CSR works together with HNA Group. Dany Nasr said that HNA's global layout contributes to a greater ability of Swissport to make a difference with a combined social responsibility agenda. Swissport's staffs can go abroad and having their career opportunities across HNA family. And Gategroup will work in with HNA Group in the WFP-HNA Syrian Refugee Assistance Initiative, intended specifically to provide food assistance to Syrian refugees in Syria, Turkey, Lebanon and Jordan.

SOURCE HNA Tourism Group