China Eastern to convert subsidiary into LCC

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China Eastern Airlines is planning to convert its Beijing-based subsidiary China United Airlines into a low-cost operator, local media reports say.

They add that China United's conversion into a low-cost operation should be completed by the end of 2014, and that the airline plans to grow to a fleet of 50 aircraft by 2015.

When contacted by Flightglobal Pro, however, China Eastern declined to comment.

China United, which operates out of Beijing Nanyuan airport, has 746 weekly flights to 33 cities in China, Flightglobal Pro data shows.

Flightglobal’s Ascend Online database shows that the carrier has a fleet of 23 Boeing 737s and one Airbus A319.

China United, a wholly owned subsidiary of China Eastern, was launched in 2004. In 2012, China Eastern completed the integration of its Hebei Branch with China United.

China Eastern’s move to convert its subsidiary into a low-cost player comes after the Civil Aviation Administration of China signalled, in 2013, that it wants to promote the development of Chinese low-cost carriers in response to the growing number of foreign LCCs flying into the country.

The regulator said it is looking to relax policies to encourage the establishment and development of LCCs, including lowering the barriers to entry for new players and making it easier for them to purchase aircraft and be allocated slots. It has also encouraged legacy carriers to set up low-cost subsidiaries.