Virgin Australia has wasted no time in seeking approval for daily flights to Hong Kong and Beijing now that it’s about to gain a major new shareholder in China’s HNA Aviation Group.
HNA is part owner of Hainan Airlines, China’s fourth largest airline.
Virgin Australia has applied to the International Air Services Commission for allocation of seven frequencies per week on the Hong Kong route. In accordance with section 12 of the International Air Services Commission Act 1992, the Commission invites other applications on the Virgin Australia application.
Virgin Australia plans to use an Airbus A330-200 aircraft fitted with 275 seats on the route.
Chinese carriers have been circling Virgin Australia following news that Air New Zealand plans to sell its shareholding. Now, Virgin Australia’s ownership is about to get even more complicated, with a fifth major shareholder. Private Chinese airline operator HNA Group is acquiring up to 19.9% of the Australian airline. Virgin will in turn gain access to the booming Chinese tourism market and raise AUD 159 million in capital.
HNA Group is a Fortune Global 500 conglomerate and the largest private operator of airlines in China. Under the commercial alliance, the companies will look to introduce direct flights between Australia and China and co-operate on commercial functions including code-sharing, frequent flyer programs, lounge access and promotion of tourism and business travel.
Virgin Australia chief executive, John Borghetti said: “The Chinese travel market represents Australia’s fastest growing and most valuable inbound travel market, with inbound passengers from China increasing by approximately 18% per year since 2010. In 2015, over one million Chinese travellers visited Australia, spending approximately AUD 8.3 billion in total on their journeys. By 2020, almost 1.5 million Chinese travellers are projected to visit Australia in a market expected to be worth up to AUD 13 billion.
“We are pleased to welcome HNA as a new shareholder and strategic alliance partner. The alliance will see us leverage the opportunities offered by China as well as the synergies of HNA’s comprehensive aviation supply chain.”
The Tourism & Transport Forum Australia (TTF) has welcomed the a new strategic alliance.
“Congratulations to Virgin Australia on this new partnership that will lead to more direct flights between Australia and Chines cities,” TTF chief executive Margy Osmond said.
“China is a crucial market for Australia’s visitor economy and it is fantastic to see our leading airlines enthusiastically perusing opportunities to broaden their services to this tourism powerhouse.”
Written by Peter Needham