Hainan Airlines to launch Yunnan Airlines with assets of Lucky Air

Hainan Airlines is joining with the Yunnan local government in southwestern China to launch Yunnan Airlines, which will be comprised mainly of the assets of Lucky Air, an HNA subsidiary launched in 2006 that apparently will cease to exist.

Based on an agreement signed between HNA and the Yunnan government, another HNA subsidiary, Grand China Air, will be the controlling stakeholder of the new Yunnan Airlines. The entity is reported to have a registered capital of more than CNY3 billion ($43.3 million).

According to HNA Chairman Chen Feng, Lucky Air's six 737-700s will be operated by the new airline, which will aim to expand to a fleet of more than 30 aircraft within three years. He added that the carrier is interested in acquiring A330s and 767s to operate international routes to Southeast Asia countries. Industry analysts pointed out that it will challenge China Eastern Airlines' current dominant position in Yunnan.