China Eastern to launch new airline in Hainan with partners including Trip.com unit, as plans to make the island a free trade hub promise greater air traffic
- The Shanghai-based airline will establish Sanya International Airlines with shareholder Juneyao Airlines, a unit of Trip.com, and two other state entities
- The new airline will serve the popular holiday island of Hainan, which is destined to become a major trade hub under plans personally crafted by President Xi
China Eastern Airlines and several partners plan to launch a new airline in Hainan, as they eye growing air traffic to China’s southernmost island province amid Beijing’s plan to turn it into a free trade hub.
China Eastern will own a majority 51 per cent share in the new carrier, which has been given the preliminary name of Sanya International Airlines. One of China Eastern’s major shareholders, Juneyao Airlines, will have a 15 per cent stake, while 14 per cent of the new company will be held by a Shanghai unit of Nasdaq-listed Trip.com, China’s largest online travel agency.
Two other state-owned entities, Sanya Development Holdings and Hainan Communications Investment Holdings, will each own 10 per cent of the new joint venture, according to an announcement on the Hong Kong Stock Exchange on Sunday.
China Eastern, which lost 3.93 million yuan in the first quarter because of the coronavirus, said the new joint venture will have registered capital of 3 billion yuan (US$420 million) to 6 billion yuan.
The shareholders will pay in cash and other assets, which could include aircrafts. The framework agreement is still pending regulators’ approval, and the green light from the boards of each investor.
“To grasp the opportunities from Hainan developing into a free trade port with Chinese characteristics, and from its development into an international tourism and consumption hub the company has worked with multiple parties to establish Sanya International Air,” China Eastern said in the Chinese language announcement.
