Hainan Airlines Group transfers 65% equity stake, Guilin Airlines officially "flies solo"

Why did the HNA group decide to exit Guilin Aviation and Tourism after ten years of cooperation?

On the evening of April 2, Guilin Tourism Co., Ltd. (abbreviated as “Guilin Tourism,” 000978.SZ) announced that the equity structure of its shareholder holding more than 5% of shares, Guilin Aviation Tourism Group Co., Ltd. (abbreviated as “Guilin Aviation and Tourism”), is expected to undergo major changes, and HNA-related equity will be transferred to a local state-owned assets platform in Guilin.

According to the announcement, Guilin Aviation and Tourism holds 57,616,000 shares of Guilin Tourism Co., Ltd. (abbreviated as “the Company”), accounting for 12.31% of the Company’s total share capital. The equity structure of Guilin Aviation and Tourism is expected to change: on March 31, 2026, HNA Aviation Group Co., Ltd., Beijing Capital Airlines Co., Ltd., Guilin Aviation and Tourism, and Guilin City Transportation Investment Holding Group Co., Ltd. (abbreviated as “Guilin Transportation”) signed an “Equity Transfer Agreement for 65% of Guilin Aviation and Tourism Group Co., Ltd.”

The key transaction parties for this equity change include two HNA-related entities and a local state-owned enterprise in Guilin. HNA Aviation Group Co., Ltd. and Beijing Capital Airlines Co., Ltd. will each hold 33% and 32% of the equity of Guilin Aviation and Tourism, respectively, and will transfer the equity to Guilin Transportation. Guilin Transportation’s actual controller is the Guilin Municipal SASAC.

The announcement clearly states that the expected change in the equity structure of a shareholder holding more than 5% will not affect the Company’s daily production and operating activities, will not result in changes to the Company’s controlling shareholder or actual controller, and the Company’s controlling shareholder will remain Guilin Tourism Investment Group Co., Ltd.

On April 3, the stock price of Guilin Tourism fell by 7.61%, closing at 6.92 yuan per share.

The relationship between the HNA group and Guilin Airlines began in 2014. In June of that year, HNA Tourism Group and a local state-owned enterprise in Guilin signed an agreement to jointly establish Guilin Aviation and Tourism, in which the HNA group held 65%, becoming the dominant party of Guilin Aviation and Tourism. In 2015, Guilin Aviation and Tourism invested to set up Guilin Airlines, and directly held 40% of its equity, forming an attempted synergistic layout of “aviation + tourism.” After equity penetration, the HNA group actually held 65% of Guilin Airlines’ equity.

On June 25, 2016, Guilin Airlines started operations. Relevant materials show that during the initial setup of Guilin Airlines, specialized technical personnel in areas such as flight operations, dispatch, cabin crew, safety, and IT were all introduced from HNA Aviation Group. Guilin City also used Guilin Airlines as an entry point to carry out in-depth cooperation with the HNA group in multiple areas, including tourism aviation, tourism finance, and tourism networks.

However, as the HNA group triggered a liquidity crisis, the control over Guilin Airlines held by the HNA side also became disputed.

In 2020, to avoid default on local bank debts, the Guilin municipal government provided Guilin Airlines with hundreds of millions of yuan, but it was not clearly stated whether it was a loan or equity investment.

In 2021, the Hainan Provincial High People’s Court approved HNA Group’s restructuring plan. According to the relevant rulings, Guilin Airlines, as an enterprise under the actual control of HNA Group, was included together into the “HNA Group’s aviation principal business” segment for attracting strategic investors.

After the restructuring, HNA asserted full rights to Guilin Airlines based on judicial rulings and demanded that it be included in a unified operational management system. However, Guilin Transportation did not recognize this, insisting on independent control over operations, personnel, and route decisions. After that, conflicts between the two sides continued to intensify.

HNA Aviation and Guilin Transportation had multiple rounds of negotiations and developed several solution sets to address issues with Guilin Airlines, attempting to restore Guilin Airlines to HNA’s operational and management control, but the two sides failed to reach an agreement.

In 2023, cracks in their cooperation gradually became more apparent. HNA suspended key support such as aircraft supplies, maintenance, and information systems on the grounds that safety control could not be implemented, and even a controversy arose over Guilin Airlines being temporarily grounded.

After this equity transfer, with both the first and second shareholders belonging to the local state-owned assets system in Guilin, the Company’s equity structure was further optimized. Guilin’s state-owned assets took full over Guilin Aviation and Tourism’s equity, enabling overall coordination of local aviation and tourism resources, which will help support long-term stable development.