Regional airlines toget help in slowdown

By Winny Wang  |   2008-12-24  |     NEWSPAPER EDITION

HNA Group, a shareholder in Hainan Airlines, has received 500 million yuan (US$73 million) from the Tianjin government as part of the country's support for the aviation industry.

Grand China Express, a Tianjin-based regional airline under HNA, got 200 million yuan. The carrier is China's first and biggest regional airline and runs more than 70 routes covering 54 cities.

The remaining 300 million yuan went to HNA's Bohai Leasing Company, which launched yesterday in Tianjin.

The group also received subsidies worth 90 million yuan from the Ministry of Finance to aid its purchases of 10 ERJ-145 regional jets.

HNA, with total assets of 80 billion yuan, is the fourth largest aviation group in China. Its businesses also include airports, hotel management, retailing and financial services. It has 182 planes on more than 500 routes, manages 13 airports and more than 40 hotels, and owns five listed companies.

The Chinese government has issued 10 measures to protect domestic airlines amid an aviation market slowdown caused by fluctuating fuel prices and falling demand.

Parents of China Southern Airlines and China Eastern Airlines will each receive 3 billion yuan aid from central government, which will help repay banking loans and replenish working capital.

The measures also include waiving several fees and taxes, worth a total of 4 billion yuan.

The Civil Aviation Administration of China has urged carriers to cancel or postpone plane deliveries due next year as a cooling economy damps travel demand.

Airlines have been asked to park unnecessary planes, retire old ones and return aircraft leased from overseas once contracts end.