The maiden flight of Chunqiu Airlines last month, one of China's
first private airlines, has started the ball rolling in encouraging
"robust" domestic travel agencies to establish airline companies.
Chunqiu Airlines was established by Shanghai Chunqiu International
Travel Services Co Ltd and Shanghai Chunqiu Chartered Flight Travel
Services Co Ltd.
If all goes according to plan, China's first joint-venture (JV)
private airline, backed by Guangdong China Travel Service, will
make its maiden flight next year, a local newspaper reported.
According to sources from Guangdong China Travel Service Co Ltd
(GDCTS), the joint venture plan, for company aimed at providing
cheap transportation services, has already been submitted to the
Guangdong Provincial Commission of State-owned Assets Supervision
and Administration. The plan took about one year to complete.
GDCTS plans to apply for approval to the General Administration
of Civil Aviation of China (CAAC) by the end of this year, and
hopes to launch the airline's maiden flight next year, the
Yangcheng Evening News reported on August 8.
The JV will have a registered capital of US$12.8 million with
GDCTS as proprietary shareholder. The remaining 49 percent stake in
the JV will be held by A-Sonic Aerospace Limited and Airocean Group
Limited from Singapore, and China Xpress Pte Limited from Hong Kong
collectively.
If the plan is approved, the airline will be the country's first
JV airline providing cheap domestic and regional flights. The JV
will be based in Guangzhou.
Currently, another two or three overseas investors are
considering buying stakes in the company, although GDCTS will
remain the majority stakeholder.?
The legal name of the company has yet to be decided.
Besides Chunqiu and GDCTS, other domestic travel service
companies have also considered establishing airline companies.
These include China CYTS Tours Holding Co Ltd (CYTS),
Wuhan-based China East Star Group Co Ltd, which has received
approval from the CAAC to establish East Star Airlines in June
providing passenger and cargo transportation from Wuhan to major
Chinese cities, and the Junyao Group, long established in the
chartered flight business. Junyao has joined hands with Three
Gorges Travel Investment Company to establish East Express Airlines
based in Shanghai.
According to the report, industry insiders revealed domestic
travel agencies don't make a great deal from selling tickets. They
only get a cut of ticket prices,?which is determined by the
airline companies. This less-than-ideal bargaining position is what
is driving many travel agencies to set up their own airline
companies.
(China.org.cn?by Zhang Tingting August 15, 2005)