Airbus holds back deliveries to HNA airlines over late payments – Financial Times

Airbus is withholding deliveries to airlines owned by HNA the troubled finance-to-aviation conglomerate amid a dispute over late payments.

A person close to the European aircraft maker confirmed that a number of A330 widebody aircraft due to be delivered to HNA owned airlines were being held on the tarmac in Toulouse while discussions with the Chinese group continued. The dispute was first reported by Reuters news agency.

“There are problems with finance,” one person with knowledge of the subject told the Financial Times. “But we are talking and there is progress.”

The dispute over payments predates the sudden death last week of HNA co-chairman Wang Jian after an accident in France. HNA airlines had been late on payments for several months, the person said.

For HNA, the loss of Mr Wang — a major shareholder with a stake of about 15 per cent — comes at a particularly difficult time as the heavily indebted conglomerate faces a compulsory reorganisation co-ordinated by national regulators.

HNA has been ordered by Beijing to return to its aviation roots after an aggressive international acquisition spree. Wang, a former civil aviation official, directed most of the operations at the company he had jointly headed since it was founded in the early 1990s.

According to Domhnal Slattery, chief executive of Avolon, the aircraft leasing company acquired by HNA’s Bohai aviation in 2016, the message from his ultimate parent company was “very clear. It is business as usual.” Mr Slattery said Avolon was not experiencing any funding issues related to HNA’s ownership. To the contrary, he said, Avolon’s liquidity would show strong improvements when second quarter results are published in August.

According to Reuters six A330s were parked on the tarmac in Toulouse, Airbus headquarters. They carried the livery of Hainan Airlines, Beijing Capital Airlines and Tianjin Airlines. The six A330s would cost a total of $1.6bn at list prices.

“We keep our conversations with our partners confidential,” HNA said in a statement.

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