Nicholas Ionides/SINGAPORE

Hainan Airlines is seeking government designation as the fourth Chinese carrier to operate services to the USA in a major challenge to giant China Eastern Airlines. A successful application would result in the airline ordering Airbus A340s or Boeing 777s. At the same time, the Hainan Island-based carrier is to firm up options on 20 Fairchild Dornier 328JETs in line with Chinese Government calls for an expansion of feeder services within the country.

Chinese industry sources say Hainan, which is well connected in Beijing, has been aggressively lobbying, efforts which have delayed the expected award of the rights to China Cargo Airlines, a China Eastern subsidiary.

A senior Hainan source says it is planning services to San Francisco, Los Angeles and possibly Seattle, with services most likely originating in Shanghai, China Eastern's home base. Hainan is also considering services from the Chinese capital through Beijing-based China Xinhua Airlines, which it is purchasing.

Air China, China Eastern and China Southern Airlines operate US flights, but the China-US air services agreement now allows a fourth designated operator from each side. China Eastern has been seeking rights for 70%-owned China Cargo for some time, with the all-cargo airline now operating Boeing MD-11Fs to the USA under rights held by its parent.

United Parcel Service recently became the USA's fourth carrier, joining FedEx, Northwest Airlines and United Airlines.

Hainan won approval to operate international flights in 1999 and hopes to serve South Korea, Japan, Australia, Thailand and Singapore from July next year when it starts taking delivery of up to 10 Boeing 767-300ERs.

Meanwhile, senior Hainan executives say government approval has been secured to firm up 20 328JET options and the purchase of one more in a move that will more than double its fleet of the type to 40. Hainan placed firm orders for 19 328JETs in August 1999 to join its Boeing 737-based fleet.

Hainan has also been studying the establishment of a new Hong Kong-based passenger airline operating regional jets to mainland China and other Asian destinations together with helicopter operator Helicopters Hong Kong.

Hong Kong-based Dragonair is studying the acquisition of regional jets to serve new points in China.

Source: Flight International