Hainan Airlines parent HNA Group is planning to launch Urumqi Airlines, in conjunction with the Urumqi municipal government. The new subsidiary will further explore the market potential in West China.

The new venture will be launched based on the assets of Hainan Airlines Xinjiang Branch Co., which is the second biggest carrier in the Xinjiang Uygur Autonomous Region, following China Southern Airlines.

According to an industry insider, Haikou-based Hainan Airlines is expected to be the controlling stakeholder, but the ownership ratio has not yet been determined.

Hainan Airlines president Wang Yingming said the new subsidiary is expected to operate not only on regional routes in the Xinjiang Uygur Autonomous Region, but would open new routes to Middle Asia and Europe from Urumqi. It is also planning to launch an IPO “at the appropriate time.”

The new entity is expected to face fierce competition from China Southern Airlines, which plans to build Urumqi as its key hub in West China and open more new international routes to the Middle Asia, West Asia and Europe from the Xinjiang Uygur Autonomous Region.

It has become a growing trend for domestic carriers to strengthen their cooperation with local governments.

Hainan Airlines has launched Capital Airlines, in conjunction with the Beijing government; West Air with the Chongqing government; Lucky Air with the Yunnan government; and Tianjin Airlines with the Tianjin government.

Additionally, Hainan Airlines plans to invest more than CNY1billion ($159 million) to establish Fuzhou Airlines in conjunction with the Fuzhou provincial government.

SOURCE: atwonline.com

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