Nicholas Ionides/SINGAPORE

Hainan Airlines has agreed to purchase 10 new Boeing 767-300ERs for an aggressive expansion into international operations as it seeks to become a major player in the Chinese market.

Industry sources in China say the Hainan Island-based carrier has agreed terms of the purchase with Boeing. Deliveries are slated to begin in July 2002.

A senior Hainan source confirms the plan to acquire 767s in the carrier's first deal for wide-body aircraft. He says government approval has been secured for three aircraft and approval is being sought to take a further seven as firm orders. An engine selection has yet to be made.

The source says the carrier aims to launch international services to points in South Korea and Japan, "and possibly Sydney, Thailand and Singapore".

Hainan's selection of the 767 comes over a year after it issued a request for proposals (RFP) to Airbus and Boeing. The RFP was issued soon after the carrier won Civil Aviation Administration of China (CAAC) approval to operate international flights.

The carrier aims to start international operations with services from Hainan Island, which is a fast-growing tourist market. It is also considering operations from bigger cities such as Guangzhou and Shanghai in a move that could put it into conflict with larger carriers already operating from those cities.

The CAAC is consolidating the 10 airlines under its direct control into three major groups led by Air China, China Eastern Airlines and China Southern Airlines. Although not subject to direct CAAC control, Hainan has been seeking to establish itself as the main "second-tier" airline and has led the way in terms of take-overs, acquiring Changan Airlines and recently agreeing to purchase China Xinhua Airlines.

Hainan was only set up in 1993 but has grown aggressively. It has a core fleet of around 35 Boeing737-300/400/800s and Fairchild Dornier 328JETs.

Source: Flight International