AIR China yesterday inaugurated its one-billion-yuan (US$155 million) subsidiary in Dalian City, Liaoning Province, part of a competitive trend among major Chinese carriers to link up with local governments to tap opportunities in regional markets.
Air China, the country's flagship international carrier, invested 800 million yuan for an 80 percent stake in Dalian Airlines and the Dalian government paid 200 million yuan through its state-owned asset management arm for the remaining share, it said in an e-mailed statement yesterday.
The new carrier will boost Air China's presence in northeastern China by operating flights from Dalian to major cities such as Beijing, Shanghai and Shenzhen, and to Japan and South Korea in future.
Dalian Airlines plans to expand its fleet from three Boeing 737-800 jets to five aircrafts in the first half of 2012.
"Dalian is the biggest port city in northeastern China with rich natural and tourism resources," Air China said. "The city is being built into an international shipping center of Northeast Asia, a logistics hub and a regional financial center, which generate huge growth potential for the aviation market."
To tap the burgeoning domestic regional travel markets, Chinese airlines are cooperating with local governments.
China Southern Airlines has a branch in Dalian and operates a fleet of 19 airplanes. It has a 40-percent share of the city's aviation market.
Last week China Eastern Airlines, the country's second biggest carrier, invested 2.38 billion yuan for 65 percent of a joint venture it launched in Yunnan Province. The province holds the remaining shares in the venture.
The Yunnan government has also invested 290 million yuan for 32 percent of Lucky Air, a subsidiary under HNA Group, parent of Hainan Airlines. HNA also partnered local governments to set up Tianjin Airlines and Capital Airlines.



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