HNA Group is set to acquire a roughly 13% stake in Virgin Australia Group (VAG) for AUD159 million (USD115 million) the Australian carrier has announced. Once all Chinese and Australian regulatory approvals have been secured, HNA will occupy a seat on Virgin's board and will also have the option of increasing its shareholding to 19.99% should it participate in Virgin's capital structure review.

“We are pleased to welcome HNA as a new shareholder and strategic alliance partner,” the Chief Executive Officer of the Virgin Australia Group, John Borghetti, said. "The alliance will see us leverage the opportunities offered by China as well as the synergies of HNA’s comprehensive aviation supply chain."

As part of their strategic commercial alliance, the companies will look at starting direct flights between Australia and China as well as cooperating through code-shares, frequent flyer programs, lounge access and the promotion of leisure and business travel.

HNA's entry into Virgin Australia's shareholding has diluted other carrier's stakes. As it stands, Air New Zealand's stake will fall from 25.9% to 22.5%; Singapore Airlines from 22.8% to 19.8%; Etihad Airways (EY, Abu Dhabi International) from 24.2% to 21%; and Virgin Group from 10% to 8.7%.

Meanwhile, Richard Branson has confirmed that several potential suitors have expressed an interest in acquiring Air New Zealand's near 26% stake in VAG. Though he did not disclose any names, recent Australian media reports have linked the stake to China Southern Airlines (CZ, Guangzhou), Cathay Pacific (CX, Hong Kong International), and possibly Singapore Airlines (SQ, Singapore Changi) among others.

Branson told Bloomberg in an interview that his Virgin Group was also considering its options insofar as Air New Zealand's shareholding was concerned.