China Eastern Airlines, China’s second-largest airline, will partner with several undisclosed Chinese companies to launch a new airline despite the negative impacts of the COVID-19 pandemic. This new airline will be based in the island of Hainan, which is the smallest and southernmost province of the People's Republic of China. China Eastern Airlines will own a majority share in the new airline, which will be called Sanya International Airlines. Shanghai-based Juneyao Airlines is said to also play a role in launching the new airline. No timeframe was given for the launch.
Photo by Jack Prebble | AeroNewsX
This is not the first time China Eastern played a role in the creation of a new airline. Just earlier this year China Eastern Airlines unveiled another subsidiary, OTT Airlines, which will mainly operate Chinese-made aircraft, including the COMAC ARJ21 and the C919. That airline will be based at Shanghai Hongqiao Airport.
The urge to create this air carrier is to capitalize on Hainan's growing significance in China. Hainan is vast compared to Hong Kong and is a popular holiday destination for Chinese tourists. Chinese president Xi Jinping made it clear to turn the island into the nation's largest free-trade zone, as was announced in April 2018. The plan was to gradually make the island into a pilot free trade zone by 2020 and transform the entire island into a free trade port by the year 2025. This will involve inviting foreign and multinational companies to set up their regional and international headquarters in Hainan.
China’s capital, Beijing, outlined plans reduce various tax rates on the island of Hainan for residents and to also relax visa requirements for leisure and business travelers. Shaun Rein, founder of the China Market Research Group, said it was actually a good 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."
Rein went on to say that the US-China trade war propelled, "emerging patriotism with Chinese citizens wanting to show their children how great their country is and to teach them more about its heritage. 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."