(Yicai Global) Dec. 10 -- The ‘new’ Hainan Airlines, which has just sold a majority stake to Fangda Group Industrial, will be one of the world’s best airlines within 30 years and will triple the size of its fleet in the next five years, the chairman of the Chinese chemicals and steel manufacturer said.

Hainan Airlines’ business targets are to be the best in the world in terms of safety, services and profits within 30 years and to have a fleet size of 1,000 planes by 2026, Fang Wei said to a gathering of over 2,500 staff members on Dec. 8, the first day that the new leadership came into effect. At present, Hainan Airlines is the country’s fourth largest airliner with 300 aircraft and China Southern Airlines is the biggest with 874.

There will be no staff layoffs and no salary cuts, Fang said. He has full confidence in the 60,000 executives and staff members at Hainan Airlines and will not send anyone from Fangda, not even a cashier, to work at the Haikou-based airliner, he said. However, all executives will be under assessment for a period from six months to a year.

Salaries will be paid on time and benefits will be resumed from January next year, Fang said. Twenty percent of income in excess of the year’s profit target will be distributed as staff rewards. The human resources departments must conduct regular assessment of the company’s employees to ensure timely distribution of the rewards and any penalties.

This is typical of how Beijing-based Fangda operates, industry insiders said. Fang Wei will not interfere with management at first, to keep employees mobilized. But he will watch performance indicators very closely and act swiftly to reward or punish staff.

For instance, every year employees at the groups’ steel makers are assessed, they said. Those who rank well will be granted bonuses, while those who rank at the bottom will be removed from their posts for further training.

With such a model, Fangda was able to turn around Nanchang Iron and Steel as well as Pingxiang Iron and Steel that had been close to bankruptcy before being bailed out by Fangda and are now top performers in the iron and steel sector.

Fangda has made a fortune from acquiring firms on the verge of bankruptcy at low cost. Last September it submitted the winning bid for a controlling stake in troubled Hainan Airlines at CNY38 billion (USD6 billion), plus an additional CNY3 billion (USD472 million) to supplement working capital.

Editors: Tang Shihua, Kim Taylor