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Chinese independents co-operate to form defensive alliance

Six independent provincial Chinese carriers, led by Hainan Airlines, have signed an agreement to form the country's first co-operative alliance, in a move designed to strengthen their position against competition and take-over moves by larger, state-owned, airlines.

The New Star (Xinxing) Air Alliance will consist of Hainan Airlines, Shandong Airlines, Shenzhen Airlines, Sichuan Airlines, Wuhan Airlines and Zhongyuan Airlines. Under a deal signed in Beijing on 8 September, the alliance will come into operation from 1 January, 1998.

Areas of collaboration will include integrating services, ground handling, shared use of airport services, marketing and ticket sales and aircraft maintenance. The six carriers complement one another geographically and most of them already enjoy a high degree of equipment commonality.

The New Star Alliance will have a combined strength of some 57 aircraft, 15 of which are operated by Haikou-based Hainan, including nine Boeing 737-300/400s. Shenzhen operates a further four 737-300s, Chengdu-based Sichuan has three Airbus Industrie A320s, Jinan-based Shandong flies three 737-300s, Wuhan operates three 737-300s and Zhengzhou-based Zhongyuan has three 737-300s.

With only an estimated six of China's 35 airlines making a profit, the Civil Aviation Administration of China has been pushing for airlines to be rationalised.

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