Hainan Airlines A330-200.


Hainan Airlines (HU) has signed a cooperation agreement with the Fujian provincial government to launch a new subsidiary, Fuzhou Airlines, as it expands into the South China market.

HU did not give a specific timetable for the launch, which needs approval from the Civil Aviation Administration of China. The regulator has raised the bar for new entrants in recent years, citing safety concerns (ATW Daily News, March 1, 2011).

Industry analysts point out Fuzhou Airlines would compete with Xiamen Airlines (MF), which uses Fuzhou as one of its main operating bases. MF holds a dominant position in the Fuzhou market with a 50% market share.

In recent years, China’s major carriers have forged closer cooperative relationships with different local governments, enabling them to receive favorable policy support as well as cash support.

Air China has launched Dalian Airlines (ATW Daily News, Dec. 14, 2011) and Beijing Airlines (ATW Daily News, May 22) with local government support. China Eastern Airlines received cash injections from the Yunnan (ATW Daily News, Aug. 4, 2011) and Wuhan (ATW Daily News, April 10) provincial governments to relaunch their branch companies in these two provinces.


SOURCE: atwonline.com


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