China Eastern, China’s second biggest airline, has announced its intentions to launch a new carrier to be based in Hainan, a free-trade hub and popular tourist hotspot in the country.
The government-backed China Eastern will own a majority 51 per cent stake in the new carrier, joined by other Chinese shareholders including Juneyao Airlines and online travel agency Trip.com.
The partners are reportedly hoping to capitalise on Hainan’s increasing demand as a tourist hotspot for Chinese and international travellers through the launch of the new carrier, to be named Sanya International Airlines.
The island of Hainan is about 30 times the size of Hong Kong, and is currently home to 8 million people.
Chinese President Xi Jinping has announced his intentions to turn the island into the nation’s largest free-trade zone, while lowering the income tax rate for individuals and companies to 15 per cent, and relaxing visa requirements for tourists and business travellers to assist in driving demand.
Currently, no time frame has been provided for the launch of the new airline, which is still subject to regulatory approval.
The news of launching a new international carrier comes despite a global near-shutdown of the aviation industry, amid the outbreak of COVID-19, which saw countries close their borders and demand for flights dry up almost instantaneously.
Airlines around the world have grounded their fleets and cut capacity by over 90 per cent, with some even shutting their doors for good.
As such, according to Greg Waldron, Asia managing editor at FlightGlobal, the airline’s launch “will likely depend” on the ongoing recovery of Chinese domestic travel traffic, as well as the management of the COVID-19 outbreak within China.
“It takes time to build an airline, however, so a great deal of work needs to take place in terms of equipment and personnel before the airline takes to the air,” Waldron said.
On the other hand, Shaun Rein, founder of the China Market Research Group, said that now actually might be an ideal time to start a new airline focused on Hainan.
“Even before COVID, 2020 was the year of domestic Chinese tourism as China wants to focus more on seeing their own country, especially hot spots like Hainan, Yunnan and emerging ones like Gansu,” he said.
Rein added that the US-China trade war has seen “emerging patriotism with Chinese citizens wanting to show their children how great their country is and to teach them more about its heritage”.
Meanwhile, ongoing pro-democracy protests in Hong Kong have discouraged many Chinese travellers from visiting the former British colony, further encouraging domestic travel to Hainan.
“Hainan itself as a destination is hot right now, especially as the government supports duty-free shopping there. Hainan also has no quarantine or other travel restrictions,” Rein said.
