DAVOS, Switzerland, Jan 31 (Reuters) - HNA Group, parent of China's Hainan Airlines Co, is in talks with a number of local governments on steps to help it, potentially including cash injections, its chairman said on Saturday.
HNA Group received a 500 million yuan ($73 million) cash injection from the Tianjin municipal government late last year, making it the third Chinese airline group to receive government aid as the economy slows.
'We expect to get further support from the Hainan provincial government and some other local governments, in line with the central government's programme for supporting domestic demand, but it's not clear yet exactly what kind of support that will be,' HNA's Chairman Chen Feng told Reuters.
The moves could include cash injections or favourable policy measures, Chen said in an interview on the sidelines of the annual meeting of the World Economic Forum.
The airline said last week that it expected to report a loss for 2008 because of slumping traffic demand and higher fuel prices during much of the year.
China's three biggest airlines -- Air China , China Southern Airlines and China Eastern Airlines -- have also warned of losses for 2008.
Chen expects passenger traffic and freight volume at Hainan Airlines, China's fourth-largest carrier, to both grow by at least 15 percent this year, Chen said, after a tough 2008.
To cut costs, Hainan Airlines laid off over 1,000 people last year, including by not renewing contracts and streamlining its management structure, Chen said.
Management had also taken a 30 percent pay cut, he said, adding that it was not clear yet whether it would lay off more people this year.
The company is in talks with aircraft makers on delaying delivery of some aircraft it had previously ordered, but it might still have to take delivery of 10 to 20 mid- and large-sized aircraft this year, Chen said.
'Those that we can delay, we'll try our best to delay. But we'll have to take some,' he said.
For full coverage, blogs and TV from Davos go to http://www.reuters.com/davos
(Reporting by Jason Subler; Editing by Charles Dick) Keywords: DAVOS HAINAN/ (Davos newsroom; +41 814 137 937; jason.subler@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
HNA Group received a 500 million yuan ($73 million) cash injection from the Tianjin municipal government late last year, making it the third Chinese airline group to receive government aid as the economy slows.
'We expect to get further support from the Hainan provincial government and some other local governments, in line with the central government's programme for supporting domestic demand, but it's not clear yet exactly what kind of support that will be,' HNA's Chairman Chen Feng told Reuters.
The moves could include cash injections or favourable policy measures, Chen said in an interview on the sidelines of the annual meeting of the World Economic Forum.
The airline said last week that it expected to report a loss for 2008 because of slumping traffic demand and higher fuel prices during much of the year.
China's three biggest airlines -- Air China , China Southern Airlines and China Eastern Airlines -- have also warned of losses for 2008.
Chen expects passenger traffic and freight volume at Hainan Airlines, China's fourth-largest carrier, to both grow by at least 15 percent this year, Chen said, after a tough 2008.
To cut costs, Hainan Airlines laid off over 1,000 people last year, including by not renewing contracts and streamlining its management structure, Chen said.
Management had also taken a 30 percent pay cut, he said, adding that it was not clear yet whether it would lay off more people this year.
The company is in talks with aircraft makers on delaying delivery of some aircraft it had previously ordered, but it might still have to take delivery of 10 to 20 mid- and large-sized aircraft this year, Chen said.
'Those that we can delay, we'll try our best to delay. But we'll have to take some,' he said.
For full coverage, blogs and TV from Davos go to http://www.reuters.com/davos
(Reporting by Jason Subler; Editing by Charles Dick) Keywords: DAVOS HAINAN/ (Davos newsroom; +41 814 137 937; jason.subler@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.