This is one of the bigger news stories today.

HNA Group has announced that it has entered bankruptcy reorganization.

The original statement is below:

"Bankruptcy reorganization is a system under the Enterprise Bankruptcy Law. It refers to a legal process designed specifically for companies that may be facing, or have already met, the conditions for bankruptcy but still retain value and hope for revival. Upon application by relevant stakeholders, and under the supervision of the court with participation from interested parties, the company undergoes business restructuring and debt adjustment to help the debtor overcome financial distress and restore its operating capability."

So the company’s shareholders, the Hainan provincial government, and the central government all do not want a relatively strong international company to disappear completely (or, perhaps, do not want too much foreign capital stepping in). The idea is to protect HNA’s stronger assets, while restructuring or spinning off the weaker ones, so that HNA can return to a more normal track.

For now, HNA’s Fortune Wings Club has not been affected, and flight operations have not been affected either.

For the entire airline industry, 2020 can be summed up in two words: disaster. Dozens of airlines around the world filed for bankruptcy, including major alliance carriers such as Thai Airways and Avianca.

As for HNA, it is quite a fall—from its high-flying years of buying assets all over the world, to the more recent phase of selling, selling, selling, and now to bankruptcy reorganization. There are many reasons behind this: internal management issues, such as pouring too much money into low-return or even loss-making overseas projects, overly aggressive global route expansion that also lost money, and even political factors behind the scenes...

Hainan Airlines is the only five-star airline in mainland China. Its hard product and soft product are both among the best in the country, and it has long been one of the favorite airlines among aviation enthusiasts. Hopefully it can recover quickly and get back on track.