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Hainan Airlines with a big year ahead

A fourth pillar of Chinese aviation is rapidly emerging. Grand China Airlines, a company established in 2004 as the vehicle to merge the major aviation assets of Hainan Airlines, Xinhua Air, Changan Air and…

A fourth pillar of Chinese aviation is rapidly emerging. Grand China Airlines, a company established in 2004 as the vehicle to merge the major aviation assets of Hainan Airlines, Xinhua Air, Changan Air and Shanxi Air, has cleared a major hurdle in receiving its operating licence from the CAAC as the Centre for Asia Pacific Aviation reported.

The move paves the way for Grand China Airlines to complete a planned listing in Hong Kong, possibly as early as the second half of 2007. The listing, which could raise up to USD500 million, would be a huge achievement for a carrier with roots in the resort island of Hainan in the South China Sea.

The carrier’s leisure-based, sun-seeking tourist image has progressively been replaced with a hard-edge business travel focus, borne out by the fact that over 16% of the airline’s capacity is now focused on the Beijing market (with just 9% in Haikou, the capital of Hainan Province – see today’s edition of Airport Business Daily for more information). Hainan Airlines Group is also establishing a regional carrier based in Tianjin (near Beijing) and has a stake in fast-growing Hong Kong carrier, Hong Kong Express.

As the key element in the Grand China Airlines mix, Hainan Airlines had a successful 2006, increasing revenues and turning around losses on the back of a 12.4% increase in passenger numbers. The carrier plans to add two B737-800s, three A319s (two leased) and two leased A330s to its fleet of 101 aircraft in 2007, to continue to expand its presence in the Chinese domestic market. Hainan Airlines, including Xinhua Air, Changan Air and Shanxi Air, has an 8% share of the market.

Hainan also already operates a number of international routes (Osaka, Incheon, Bangkok, Brussells, Budapest, Novisibirsk, as well as St Petersburg and Geneva from Summer 2007), and clearly has greater aspirations on the world stage.

Grand China Airlines will be in a strong position to benefit from the Beijing 2008 Olympics. With the world’s eyes focusing on the capital next year, this ambitious Chinese carrier will continue to garner industry attention.

Co-Founder & Chief Editor - TravelDailyNews Media Network | + Articles

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.

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