Urumqi Air set to take off with New Silk Road

China Daily (Canada) - - BUSINESS - ByWANGWEN wangwen@chi­nadaily.com.cn

Urumqi Air, the first lo­cal car­rier in theXin­jiang Uygur au­ton­o­mous re­gion, will make its maiden flight on Fri­day from Urumqi to Yin­ing in the au­ton­o­mous re­gion.

The car­rier, which is ex­pected to play a ma­jor role in the New Silk Road, got its op­er­a­tion cer­tifi­cate on Thurs­day. Urumqi Air, with three Boe­ing 737 air­craft, will fly four re­gional routes within Xin­jiang and two routes to cities else­where in China.

Cen Jian­jun, pres­i­dent of Urumqi Air, said the car­rier was con­sid­er­ing trunk routes between Urumqi and des­ti­na­tions like Bei­jing, Shang­hai and Guangzhou, as well as in­ter­na­tional flights.

“Urumqi has sig­nif­i­cant ge­o­graph­i­cal ad­van­tages to con­nect China and Cen­tral Asia. We will de­velop in­ter­na­tional routes to Cen­tral Asia, and even Europe, in the near future,” Cen said.

The car­rier has reg­is­tered cap­i­tal of 3 bil­lion yuan ($492 mil­lion), with Hainan Air­lines Co Ltd, the coun­try’s fourth-largest car­rier, ac­count­ing for 70 per­cent of the in­vest­ment.

Ruan Chengjiang, gen­eral man­ager of Urumqi Ur­ban Con­struc­tion In­vest­ment Co, which is a lo­cal govern­men­towned in­vest­ment com­pany, said his firm holds the bal­ance, or a 30 per­cent stake, of the car­rier.

The new air­line is ex­pected to gain from the gov­ern­ment’s ef­forts to de­velop the Silk Road economic belt, and Urumqi will be­come an im­por­tant avi­a­tion hub, an­a­lysts said.

The an­nual pas­sen­ger vol­ume of Urumqi In­ter­na­tional Air­port is ex­pected to reach 30 mil­lion by 2020 from 13.35 mil­lion in 2012, ac­cord­ing to ex­perts.

Jin Ji­axin, an an­a­lyst with Xiang­cai Se­cu­ri­ties Co Ltd, said Urumqi Air is ex­pected to get good slots and routes in the re­gion as it is the only car­rier in which the lo­cal

We will de­velop in­ter­na­tional routes to Cen­tral Asia, and even Europe, in the near future.” CEN JIAN­JUN PRES­I­DENT, URUMQI AIR

gov­ern­ment is in­vest­ing.

Ac­cord­ing to Jin, Hainan Air­lines will hold a 15 per­cent mar­ket share in Xin­jiang dur­ing the early stages of Urumqi Air, and the fig­ure could reach 25 per­cent over the long term.

Xin Di, chair­man of Hainan Air­lines, said be­sides Xin­jiang, Hainan Air­lines is also build­ing up its sub­sidiaries in other ar­eas. Its other two sub­sidiaries — Fuzhou Air­lines in Fu­jian prov­ince and Beibu Gulf Air­lines in the Guangxi Zhuang au­ton­o­mous re­gion — are ex­pected to be­come op­er­a­tional later this year and early next year, he said.

Most of the Chi­nese car­ri­ers are tak­ing steps to tap mar­kets within the coun­try more ag­gres­sively to off­set pres­sures from ris­ing costs and dwin­dling in­come, ex­perts said.

Air China Ltd in­vested 800 mil­lion yuan to es­tab­lish In­nerMon­go­lia Air­lines in Jan­uary, as China’s avi­a­tion au­thor­i­ties be­gan ac­cept­ing ap­pli­ca­tions for new air­lines in 2013, af­ter a six-year sus­pen­sion.

Xi­a­men Air­lines Co Ltd signed a co­op­er­a­tion agree­ment with the lo­cal gov­ern­ment in Jiangxi prov­ince to start Jiangxi Air­lines.

China’s air traf­fic is in­creas­ing and the do­mes­tic mar­ket, es­pe­cially the re­gional mar­ket, has huge un­tapped po­ten­tial, ex­perts said.

Li Xiao­jin, a pro­fes­sor at the Tian­jin-based Civil Avi­a­tion Univer­sity of China, said that most of the car­ri­ers are chart­ing plans to tap the nichemar­ket in smaller cities.

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