Even though the global airline industry is mired in its worst crisis ever, China Eastern Airlines reckons there is room for a new airline startup.
China Eastern is backing a new Hainan based airline along with partners including Juneyao Airlines and an affiliate of China’s largest OTA Trip.com.
China Eastern will take a majority 51% stake in Sanya International Airlines, according to a Hong Kong stock exchange filing.
The new carrier will start operations with at least US$420 million in capital.
China Eastern sees a big opportunity for a new airline based in Hainan as the Chinese government positions it as a new free trade zone.
Hainan is already a highly popular travel destination and is known as ‘China’s Hawaii.’
"To grasp the opportunities from Hainan developing into a free trade port and from its development into an international tourism hub the company has worked with multiple parties to establish Sanya International Air," China Eastern said in the filing.
"Through this collaboration, the company’s strategic position in Southern China will further be augmented, and this should help elevate our overall competitiveness," it added.
