GRAND China Airlines, China's fourth biggest airline, was inaugurated today after the merger of four carriers including Shanghai-listed Hainan Airlines in a bid to compete with the nation's top three players in the booming market.
Grand China will start flights from Beijing today with the first flight heading to the northeastern city of Dalian, the company said in a statement. It plans to add flights gradually ahead of next year's Beijing Olympics in August.
Preparations for the new carrier started in July 2004 by consolidating the operations of Hainan Airlines, Xinhua Airlines, Chang'an Airlines and Shanxi Airlines under a newly set-up parent group called Grand China Airlines Holdings Co.
The parent company is 48.6 percent held by the Hainan government. United States financier George Soros owns 18.6 percent of the venture while HNA Group, parent of Hainan Airlines, holds 32.8 percent.
"The competition in the air transport industry is set to intensify following the set-up of the new carrier,'' said Wu Ke, a Zhongtian Investment Consulting Co. ``But it still needs time for Grand China to catch up with its key rivals, which have entrenched market share and capital strength.''
HNA said earlier that it hoped Grand China could issue shares in Hong Kong. The carrier may collect more than five billion yuan (US$676 million) in a stock sale as early as this year, media reports said in May, citing its chairman Chen Feng.
Grand China is planning to choose Beijing Capital International Airport as its base and perform both international and domestic passenger and cargo air transport business, HNA said a statement on its Website. The air carrier will also lease three Boeing 737-800 aircrafts from Hainan Airlines, according to the Website.