China's Hainan in talks to buy into CR Airways

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China’s Hainan Airlines is considering buying a stake in Hong Kong-based regional carrier CR Airways.

Industry sources in Hong Kong confirm that Hainan, which recently said it hopes to list its shares on the Hong Kong stock exchange next year, has been looking closely at CR and a deal may be near. It is not clear how big the stake would be.

A CR executive contacted by ATI declined to comment but it is known that a codeshare agreement was recently negotiated between CR and Hainan, covering flights between Hong Kong and both Haikou and Sanya on Hainan Island. Hainan Airlines is based at Haikou.

The codeshare agreement is expected to take effect next year. CR already serves the two Chinese destinations. Hainan does not currently serve Hong Kong but has long sought to fly to it.

Fast-growing Hainan is China’s fourth largest airline group. It has considered investing in a regional jet operation in Hong Kong in the past but no deals were concluded.

CR Airways is an independent regional carrier owned by Hong Kong businessman Robert Yip, who is a key shareholder in a company known as China Rich Holdings.

It currently operates two 50-seat Bombardier CRJ200s and one larger CRJ700. Another CRJ700 is due to be added soon.

The carrier operates regular services to six secondary cities in China as well as three in the Philippines. It also has route licences to serve many more secondary destinations in China.

CR has been seeking new investors for some time. Last year it was reported that Victor Li, son of billionaire businessman Li Ka-shing, was considering buying a stake.

Hainan executives could not be reached for comment.