Air China cleared to launch subsidiary in Inner Mongolia

The Civil Aviation Administration of China (CAAC) has cleared Air China (CA) to launch a subsidiary in Inner Mongolia, paving the way for the Beijing-based carrier to furtherexpand in the North China market.

According to the regulator, the new airline has a registered capital of CNY1 billion ($159 million), in which CA holds an 80% stake while the local government of Inner Mongolia holds a 20% stake.

The new venture, which is expected to be based at Hohhot Baita, will operate either a Boeing 737-300 or 737-700 on domestic routes.

CA has seven subsidiaries, comprising Shandong Airlines, Shenzhen Airlines, Tibet Air, Kunming Airlines, Beijing Airlines, Dalian Airlines and Henan Airlines. China Eastern Airlines also has a Yunnan subsidiary while China Southern Airlines has a Chongqing subsidiary. Hainan Airlines has a Yunnan subsidiary and Beijing-based Capital Airlines.

Industry analysts point out that subsidiaries enable China’s domestic carriers to receive cash support and enjoy favorable policies from different local governments. However, safety concerns remain a challenge because of the severe shortage of pilots and other aviation professionals in China.