Hainan Airlines is Bankrupt
Yet another victim of the coronavirus
After several weeks of fighting to stay in business, Hainan Airlines have reportedly applied for bankruptcy protection. The airline has been haemorrhaging money during the travel bans brought on by the coronavirus infection, and can’t take any more losses.
According to users on Weibo (the Chinese equivalent to Twitter), the airline has been rejecting customer requests for refunds after all flights were cancelled following government instruction. No-one who calls the airline is getting through, and representatives for the airline are tight-lipped on whether refunds will ever be processed.
The Chinese government has reportedly rejected several applications for bankruptcy protection from the airline previously, although it’s unclear whether the most recent application was accepted.
Independence is a Dying Breed
One of the very few independent airlines in China, Hainan Airlines was established in 1989 inside one of China’s ‘special economic zones.’ After restructuring in 1992, 5.33% of the company was owned by the Hainan government, 20% by corporate staff and the rest owned by various shareholders.
Besides being the first joint-stock air-transport company, Hainan Airlines was the first to own shares in a Chinese airport, owning 25% of the Haikou Meilan International Airport.
Hainan Airlines runs the frequent flyer program 金鹏俱乐部 (Fortune Wings Club) which is the program also utilised by the airlines subsidiaries; Hong Kong Airlines, Tianjin Airlines, Beijing Capital Airlines, GX Airlines, Fuzhou Airlines, Lucky Air, Urumqi Airlines, Suparna Airlines and Grand China Air.
It’s been unofficially reported that several assets owned by the company including aircraft have been sold to state-owned airlines and government departments. Although like most news in China, this is difficult to corroborate.
A Downward Slide
Despite high hopes from lovers of independent business, the bankruptcy won’t be enormous surprise for industry analysts. Glowing articles that praise the now defunct airline are featured on several Chinese state websites, but the company has been operating at a loss for several years.
The domestic travel bans across China have crippled every independent travel company that would usually be experiencing their best time of year as the Chinese New Year period ends, and the school semester is supposed to begin.
Instead, travel is at a complete standstill and the school semester is facing country-wide delays.
Current estimates for schools to re-begin is April 1st, meaning it may take until then for anyone to resume travel. This leaves six more weeks of no customers and potentially lots more bankruptcy requests from other companies on the way.
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