CAAC green lights China Eastern’s business aviation company

The Civil Aviation Administration of China (CAAC) has granted approval for China Eastern Airlines (MU) to a launch a business aviation company based on the assets of subsidiary China Eastern Airlines Executive Air (CEAEA).

CEAEA was established in 1995 as a ground handling company for business jets. The new entity would operate five aircraft and is expected to expand its fleet to 10 this year, according to CEAEA MD Wang Taiping. 

All major Chinese carriers have been exploring the burgeoning business aviation market in China.

Hainan Airlines operates Beijing-based Deer Jet Co. and Shanghai Deer Jet Co. (ATW Daily News, April 11, 2010). Air China established Beijing Airlines in conjunction with the Beijing municipal government in April 2011 to enhance its position in the fast-growing domestic business aviation market (ATW Daily News, March 4, 2011). China Southern Airlines and subsidiary Xiamen Airlines also plan to launch business aviation companies.

Deer Jet CFO Cao Yongtao said it is not easy for domestic business aviation companies to make a profit initially because of the many policy and financial hurdles “such as very high tax.” It is reported that Beijing levies a 22.85% tax to the general aviation industry, which means that business aviation companies must pay more than 20% tax on each business jet.