China Eastern new subsidiary ‘China Eastern Airlines’ Hainan for network expansion

China Eastern Airlines, the second-largest carrier of China by passenger numbers, has opened a new branch in Hainan Island. It agreed with Sanya Municipal Government to launch China Eastern Airlines Hainan with its headquarter in Yazhou Bay Science & Technology City, Hainan. The airline will deploy the capacity of up to 50 aircraft to the new location, including Haikou Meilan International (HAK), Qionghai Bo’ao (BAR), and Sanya Phoenix International (SYX), and future Danzhou Airport.

The newly established subsidiary will expand its route network from Hainan to increase domestic and international connectivity. Hainan is a leisure destination located in the southernmost point of China. China Eastern will also launch a premium express service between Haikou, the capital of Hainan, and Sanya.

As China’s government outlined a step by step approach in June to establish Hainan as a world-leading free trade hub by 2050, China Eastern Airlines will optimize its route network and investment in Hainan, where transport industries have developed at a frenetic pace with the global accessibility of regional passenger and freighter demand. The airline will also strengthen passenger handling services in South China’s Hainan Province while also prioritizing cargo and logistic infrastructure and connectivity.

Albeit the lack of direct presence at Haikou, China Eastern flies 21 times a week out of Qionghai. It serves Sanya with 78 weekly flights. As per Sanya Municipality, Hainan Airlines, China Southern Airlines are the dominant leaders of the Hainan air market. In the 1st and 2nd quarters of 2021, Hainan Airlines ranked first with 27.3% market share by passenger throughput in Haikou. China Southern Airlines had a market share of 20.5%, followed by Capital Airlines (9.7%).

In July 2020, China Eastern started creating a new airline in Sanya in conjunction with Hainan Communication Investment Holdings, Sanya Development Holdings, Juneyao Airlines, and Ctrip Travel Network Technology. A significant stake of 51% in Sanya International Airlines will belong to China Eastern, while privately-owned Juneyao will hold a 15% stake. The new carrier will base its operations in Sanya Phoenix International Airport and Sanya Hongtangwan International Airport, yet to be approved by the Civil Aviation Administration of China.

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China Eastern Airlines’ move to Hainan

The move to support Hainan free trade hub master plan by establishing a new subsidiary comes with the restructuring operations by HNA group after filing for bankruptcy in January. The air service provided by the operational unit of Hainan between Hainan and mainland China and other destinations will expand China Eastern’s presence and capacity in the air market.  

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