Creditors of China's HNA Group — the parent company of Hainan Airlines — have applied to a Chinese court for the aviation giant to be placed in bankruptcy and undergo restructuring as the group is unable to pay off its debts.

HNA, one of China's biggest conglomerates, said it has formally received a notice of the filing from the Hainan High People's Court on 29 January and it will cooperate with the court for judicial review, to carry forward the debt disposal, and support the court's protection of the legal rights of its creditors to ensure the smooth operations of the company.

"Hainan Airlines announced (29-Jan-2021) creditors applied to the court for the reorganisation of the airline and its subsidiaries, including Air Changan, Shanxi Airlines, Lucky Air, Fuzhou Airlines, Urumqi Air, Guangxi Beibu Gulf Airlines and HNA Aviation Technik.

According to HNA, its creditors have "filed an application for the initiation of reorganisation procedures against our company, on grounds that we cannot pay off due debts."

It added that it will comply with the legal instructions from the court and "promote debt disposition actively" while ensuring that businesses under its holding continue to operate business as usual.

At the end of June 2019, reports noted that the Group had about 706.7 billion yuan in debt.

HNA will become the latest aviation casualty of the coronavirus after Cirium reported that 43 commercial airlines have failed — completely ceased or suspended operations.

Meanwhile, the Group noted that its subsidiaries will perform daily operations as normal despite the "major uncertainty" on whether they will enter reorganisation process.