The Civil Aviation Administration of China (CAAC) has given approval for Juneyao Airlines to launch a low-cost unit, Jiuyuan Airlines.
The new LCC will be a joint venture between Juneyao, businessman Ji Guang Ping (who will be Jiuyuan’s executive vice president), and Chinese firms Elion Resources Group and Macrolink Group.
Jiuyuan, which means “nine yuan” in Mandarin, will have a registered capital of yuan (CNY) 600 million ($99.1 million). Juneyao will hold a controlling 69% stake as it will invest CNY 414 million. Elion Resources will hold 15%, Macrolink 10%, and Ji 6%.
The new low-cost carrier will operate out of Guangzhou Baiyun International Airport with a fleet of Airbus A320s, says CAAC. It has been approved to operate domestic passenger and cargo services.
In the initial stages, Juneyao will deploy flight, cabin and maintenance crews to Jiuyuan.
The CAAC is calling for any parties with objections to Jiuyuan's formation to submit comments by 10 February.
Jiuyuan’s approval comes after the Chinese regulator, which for years has prioritised the three state-owned carriers, signalled that it wants to encourage the development of low-cost carriers in the country’s aviation industry.
Shanghai-based Juneyao operates a fleet of 33 A320s mostly within China, and also has regional services to cities in Taiwan, Korea and Thailand.