CAAC approves AOC for LJ Air as carriers add new aircraft

July 8th 2016

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The Civil Aviation Administration of China (CAAC) has approved an air operator’s certificate (AOC) for new Harbin-based start-up Longjiang Airlines (LJ Air). Read More »

The new carrier is fully-owned by Harbin Xiangyu Co., a gold and jewellery company, and has a registered initial capital of 800 million yuan ($130 million). The carrier is led by chairman Liang Fuhua, a former vice-president at Big White Bear Jet Co.

LJ Air has purchased two second-hand A321s and is expected to also lease an A320 before launching commercial operations in the third quarter. It plans to expand its fleet to 30 aircraft by 2020 and is expected to order 15-20 A320s and E-190s from Airbus and Embraer, according to its website.

The new market entrant will launch operations on domestic routes from Harbin, including Daqing, Qiqihar, Mudanjiang, Jixi, Jiamusi, Yiwu, Heihe and Mohe, as well as trunk routes to Beijing, Shanghai, Sanya, Shenzhen, Chengdu, Hangzhou and Kunming. Like other Mainland start-ups, LJ is dreaming big, saying it would like to expand its network to Europe and the U.S. from 2020.

The carrier is expected to face stiff headwinds during the first couple years of operations, given the flurry of new market entrants in China, and the region. That said, HNA Group is preparing to launch Heilongjiang Airlines, also to be based at Harbin Taiping International Airport. Intense competition aside, Mainland aviation growth continues being hampered by an acute pilot and slot shortage.

In other China updates, Xiamen Airlines took delivery of five new B737-800s last week, expanding its all-Boeing fleet to a total of 159 aircraft. The SkyTeam carrier is regarded as one of the most profitable airlines, having delivered consecutive profits over the past 29 years.

In Shanghai, Spring Airlines received its 60^th A320 aircraft, and in Chongqing, China Express Airlines welcomed its 24^th CRJ900NG in a special 20^th anniversary livery. Orient Aviation understands that the regional carrier is close to announcing a new milestone narrow-body order.

Meanwhile, the first A320neo destined for a Mainland carrier – China Southern Airlines – has taken to the skies for its first test flight. China Southern signed a deal for 24 A320neos with AerCap in 2015.

Back in Shanghai, local heavyweight, China Eastern Airlines, this week raised 8.55 billion yuan ($1.28 billion) in a private sale of shares to a group of investors. In its first investment in the SkyTeam member, the Mainland’s largest online travel agency, Ctrip, bought three billion yuan worth of shares, giving it a 3.22% stake in China Eastern. China National Aviation Fuel also acquired three billion worth, bringing its total stake to 4.05%.

The carrier said it will use 6.83 billion yuan of the proceeds to buy new aircraft, with the remainder used to settle debt.