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Hainan Airlines invests 5.2b yuan in one month

Updated: 2013-12-18 15:50

Hainan Airlines is beefing up in the western region of China's air travel market, with its total investment for one month topping 5.2 billion yuan ($856.4 million), according to the National Business Daily.

The Haikou-based carrier has increased its investment in Chang'an Airlines, West Air and Lucky Air since Nov 21. It also announced in December that it would set up the Urumqi Airlines with Urumqi Urban Construction & Investment Co.

"The series of actions can be interpreted as consolidation of the western market," Li Xiaojin, director of the Institute of Aviation Transportation Economics at Civil Aviation University of China, told the National Business Daily.

Compared to Air China, China Eastern and China Southern, Hainan Airlines has no advantages in airline resources in Beijing, Shanghai and Guangzhou, according to sources from Hainan Airlines. It hopes to put more efforts into the western region in order to grab more market share.

Hainan Airlines announced on Nov 21 that HNA Aviation was approved to fund 400 million yuan to Chang'an Airlines. As a result of the capital increase, the stake of Hainan Airlines and HNA Aviation will turn out to be 88.03 percent and 11.79 percent, respectively.

It also announced on the same day that it was approved to fund 1 billion yuan to West Air, to obtain 29.4-percent stake of the latter.

The company later announced on Dec 5 that it has received regulatory approval to set up Urumqi Airlines along with Urumqi Urban Construction & Investment Co. The two parties will invest a total of 3 billion yuan in the Urumqi carrier, among which Hainan Airlines plans to invest 2.1 billion yuan for a 70 percent share.

It also plans to buy Grand China Air Co Ltd's 52.9 percent stake in Lucky Air for 1.7 billion yuan, according to the company's announcement on Dec 12.