HNA Group to introduce Fuzhou Airlines

HNA Group, China's fourth largest airline group, signed a cooperative agreement with the Fuzhou government, in Fujian province, on Friday to introduce Fuzhou Airlines as part of its domestic expansion plan.

The agreement placed an emphasis on using joint efforts to obtain operating approvals from the Civil Aviation Administration of China, investing in the construction of the Fuzhou airport and in the shipping industry and establishing industrial funds, among other tasks.

After Air China established Dalian Airlines last year, the other large carriers in China, including China Eastern and China Southern, are all expanding their domestic and regional presence through subsidiary operations.

Analysts say that cooperation between local governments and airline companies is mutually beneficial. On the one hand, an airline establishment can be a stimulus for the local economy; on the other hand, the government's capital injection can ease financial pressures on companies and put them in a more favorable position to obtain approvals from the Civil Aviation Administration of China.

But in Fuzhou, the provincial capital of Southeastern China's Fujian province, the market has been dominated by China Southern's subsidiary Xiamen Airlines, which has a market share of more than 50 percent.

So far, HNA Group has not disclosed a specific development plan for Fuzhou Airlines.