China's Hainan Airlines to buy 19 Boeing jets for $4.2 billion
China's Hainan Airlines, which has poured billions of dollars into overseas acquisitions, announced plans Monday to buy 19 Boeing aircraft for $4.2 billion to help meet skyrocketing travel demand by Chinese consumers.
The company said in a statement to Shanghai's stock exchange that it would buy 13 Boeing 787-9 passenger jets and six 737-8s, citing the continued "rapid growth" in China's travel market as incomes rise. It plans to issue 15 billion yuan ($2.18 billion) in bonds to help fund the deal.
Chinese airlines have seen booming business in recent years, rushing to expand their fleets and route networks amid growth that the International Air Transport Association (IATA) predicts will take China past the United States to become the world's largest air-travel market by 2024.
Hainan Airlines and its parent HNA Group have been among the most acquisitive players in a wave of overseas investments by Chinese companies in recent years.
HNA is a sprawling conglomerate with interests in aviation and tourism.
Last year alone, HNA purchased Brazil's third largest airline Azul, Swiss airline catering company gategroup, and stakes airline Virgin Australia and Portuguese national airline TAP. A unit of privately held HNA announced in October plans to buy the aircraft leasing business of US-based CIT Group Inc. for $10 billion.
The Chinese government has encouraged companies to invest overseas to open up new markets. Many companies obliged, pouring billions into overseas purchases to such an extent that Chinese authorities became worried over capital flight and the impact on the slumping yuan currency.
The government has since reversed course, denouncing "irrational" investment abroad and putting restrictions on fund outflows.