Shanghai-based China Eastern has announced plans to develop a new airline to be based on the southeast Chinese island of Hainan.

The new joint venture - named Sanya International Airlines – was announced in a signing ceremony on June 13. Set to be based at Sanya International Airport, the airline will also operate out of a new airport to be built at Sanya.

With an initial registered capital CNY 3 billion (USD $424 million), China Eastern will hold a majority 51% stake followed by its subsidiary Juneyao Airlines with a 15% stake. Joining the two carriers is the Shanghai-based unit of Trip.com and two Hainan-based entities: Hainan Province Transport Investment Holding, Sanya Development Holdings.

The new airline comes after Chinese authorities unveiled a plan to develop the tourist destination of Hainan – known as “China's Hawaii” - into a free trade hub. The Chinese government also plans to develop the island into a international tourism center by 2035.

Hainan is China's southernmost point with the South China Sea to the south of island. With an area covering over 35,000 square kilometers, it has total population of over 9 million.

The new airline subsidiary would give China Eastern a stronger presence in southern China. Guangzhou-based China Southern operates domestic and international routes from Sanya, while the island is also home to HNA Group's Hainan Airlines. Hainan Airlines is based in Haikou on the northern part of the island.

“Meanwhile, Sanya International Airlines can make full use of the comprehensive and diversified resource advantages [from the partnership] to create high-quality aviation service products and build a boutique aviation brand in Hainan,” China Eastern said in a statement.

Sanya International is the second planned airline subsidiary China Eastern has announced this year. In February the airline announced the formation of OTT Airlines which will operate a fleet of all Chinese-made aircraft including the COMAC ARJ-21 and the C919 to destinations within the Yangtze River Delta.


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