Air China to launch new carrier in Dalian
Air China has signed an agreement with authorities in the northeastern port city of Dalian to set up a new regional airline. The move will see the launch of Dalian Airlines, which will operate out of the city’s Zhoushuizi International Airport and is expected to serve regional destinations in northeast China, Korea and Japan. Dalian is the second largest city in Liaoning province, with a greater urban population in excess of six million people.
Local media reported that the deal with Beijing-based Air China came about following the collapse of a similar arrangement last year between the Dalian municipal government and Hainan Airlines. It is unclear why the Hainan Airlines agreement broke down, but the China Daily cited an unnamed source close to the deal as saying that there were “some differences” between HNA Group – Hainan Airlines’ parent company – and the Dalian government.
The Civil Aviation Administration of China (CAAC) said yesterday that Air China will invest CNY800 million (US$123.6 million) in the new airline, for an 80% stake. The Dalian government will hold the remaining 20% following an investment of CNY200 million.
The launch of Dalian Airlines will put pressure on China Southern Airlines. The Guangzhou-based carrier has 19 aircraft based in Dalian, and currently enjoys a 40% market share in the city. The deal will broaden Air China’s reach across the country. Currently thre national carrier holds stakes in several regional carriers, including Shenzhen Airlines, Henan Airlines, Sichuan Airlines and Shandong Airlines.
Meanwhile, the Shanghai Daily reported that another of China’s major carriers, China Eastern Airlines has received approval to launch a joint venture airline in the southern province of Yunnan province. The Shanghai-based airline will invest CNY2.4 billion to hold a 65 percent stake in as-yet-unnamed entity.