More China carriers at the starting blocks

by JEFFREY LEE  

February 1st 2014

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The first months of Asia’s new Lunar year - the Year of the Horse – will witness a wave of Chinese airline expansion, including the launch of five airlines in several second tier Mainland cities. Read More »

Two of China’s top airlines, Air China and the Hainan Airlines Group, will establish part-owned carriers in Inner Mongolia and Urumqi, while China Southern Airlines’ domestic subsidiary, Chongqing Airlines, will launch regional services to Hong Kong, Macau and Taiwan.

Following clearance from the Civil Aviation Administration of China (CAAC), Hainan Airlines parent, the HNA Group, will hold a 70% interest, for US$490 million, in Urumqi Airways in Xinjiang province. The Urumqi Urban Construction Investment Company will hold the remaining 30% in the new airline. The group, which is the fourth largest airline operator in China, is believed to be largely using the assets of its Hainan Airlines Xinjiang Branch Co to fund the investment.

In 2013, the president Hainan Airlines, Wang Yingming, told global media Urumqi Airways would not only operate scheduled services in Xinjiang Uygur province, but also to the Middle East and Europe from its home city.

 The Hainan Airlines group also has launched several joint venture airlines in partnerships with Mainland Chinese provincial governments including Capital Airlines and Beijing, Tianjin Airlines and Tianjin, Lucky Air and Yunnan and Chongqing and West Air. It has announced it intends to follow the same strategy with the governments of Chang ‘An, Fuzhou and Guangxi.

China’s flag carrier, Air China, meanwhile, launched an Inner Mongolian subsidiary, based in the province’s capital, Hohhot, and has commenced operations with services from its home hub and Baotou to Beijing, using B737s.

The other three new airlines are Kunming’s Ruili Airlines, former cargo airline Shenzhen Donghai Airlines and Zheijiang Loong Airlines based in Hangzhou. Ruili Airlines is owned by the Jingcheng Group and acquired B737s to begin operations in April within its home province. The CAAC cleared Shenzhen Donghai to add passenger flights last year, but has not confirmed its commencement date for the expanded services. Hangzhou’s Zheijiang Loong Airlines has ordered 20 A320s and has taken delivery of two, with plans to begin flying in the first quarter of 2014.

Several carriers are also seeking, or have won approval, to extend their domestic network to regional and international destinations. Chongqing Airlines is expecting clearance to fly to the special administrative regions of Hong Kong and Macau as well as Taiwan.

Air China plans to introduce three times a week services from Shanghai Pudong to Toronto in Canada and CSA’s 2014 strategies include three times a week services from Shenyan via Wuhan to Phuket and daily flights between Shenzhen and Bangkok.

Other routes on the list for regulatory approval are Shanghai Pudong to Chiang Mai with China Eastern Airlines; Beijing to Newark (U.S.) and Nairobi via Mumbai with Hainan Airlines; Shanghai Pudong to Chiang Mai, Osaka, Da Nang, Kuala Lumpur and Bali via Shenzhen with low-cost carrier, Spring Airlines; Lucky Air’s twice weekly service from Kunming to Singapore via Guiyang and Juneyao’s daily flights from Shanghai Pudong to Fukuoka and Osaka.