HNA sets up new general aviation investment group

In November 2015 the Central Committee of the Communist Party of China (CPC) presented its thirteenth Five-Year Plan, for the economic and social development of the People’s Republic of China between 2016 and 2020.

The plan focused on the continued economic development of the country, and introduced domestic policies aimed at increasing the quality of life of Chinese citizens.

But along with the headline-making policies was a section on general aviation. Previous Five-Year Plans had stressed the importance of building a world-class airline network, but with an ongoing shortage of pilots, and no clear path for Chinese citizens to take up flying and become the next generation of airline pilots, the government now sees general aviation as a way of making this happen.

HNA General Investment Group has been set up to capitalise on the drive to promote general aviation. The investment group is aiming to become one of the most comprehensive aviation groups in China, covering not only private jets but also helicopters, general aviation airports, aviation schools and other aviation-related enterprises.

The HNA Group is no stranger to aviation. It owns Hainan Airlines and Deer Jet, one of the first private jet operators in China and currently one of the largest private jet operators in the whole of Asia.

As part of the new setup, Deer Jet has become a subsidiary of HNA General Aviation, with Deer Jet’s president Zhang Peng becoming the CEO of the new group.

Zhang says the introduction of the thirteenth Five-Year Plan has eased investment in the sector, opening up new areas including airport infrastructure, which was not possible in the past. Deer Jet has had experience of this in the past, having built up several Fixed Base Operators (FBOs) around the country.

Deer Jet’s first FBO was in Beijing, which was built especially for the influx of business aircraft expected for the 2008 Olympic Games. Under current government rules, though, only one FBO is allowed to operate at each airport, so Deer Jet had to seek special permission to operate it during the games.

After the Games finished, Deer Jet had to stop fully using the facility. It is still in use today, although its aircraft are towed around to the Capital Jet FBO to be used.

Expanding airport infrastructure has been one of the main barriers growth in China, not only in business aviation but in general aviation as well.

Zhang says that the company has expanded further into general aviation by founding several new companies, including Capital Helicopters and Hubei General Aviation. It has also formed partnerships with provincial and local governments in several Chinese provinces to invest in building up resources and the infrastructure needed to support the growth of general aviation.

As well as investing in aviation ventures, HNA General Aviation has also been involved in events designed to help change the country’s rules and attitudes towards general aviation.

The first of these came shortly after the company was formed, and was undertaken as a separate forum attached to the Boao Forum for Asia Annual Conference. In a session called “Addressing Issues for the Development of China’s General Aviation Industry”, delegates from government agencies, scholars and business leaders got together to talk through current policies and issues, and discuss viable solutions.

As well as investing in aviation projects in China, HNA General Aviation has invested in companies outside of the mainland. Its first major investment was in Hong Kong with AsiaJet, who were acquired by HNA’s locally based operator HongKong Jet.

With the move into investing in airport infrastructure came a strategic investment in UAS International Trip Support. Based in Dubai, UAS is already one of the largest trip support companies in the world with a large network of offices around the world. With HNA on board, the plan is to grow UAS to be the second largest support company in the world.

The UAS headquarters in Dubai will also be used as a strategic location in which to expand HNA’s reach into Africa, the Middle East, and Europe. The company also has investments in training centres and aviation schools in China, Australia and France.

Overall, the Group’s aim is to build up a portfolio of investments across all aspects of general aviation, right the way from private jets to the infrastructure to support them.

For HNA, the timing could not be better. Following several quiet years, business aviation in China is beginning to grow again, and confidence is returning to operators in the region. Charter sales have been increasing, as have pre-owned aircraft sales into the country.

HNA grew Deer Jet to be not only the largest private jet operator in China but also in Asia. By investing in general aviation and infrastructure, it can ensure that it diversifies its asset base and that its private jet interests grow as well.