After East Star Airlines went into bankruptcy proceedings, Air China Limited decided to give up the acquisition of the private airway and set up its own branch in Wuhan City, Hubei Province, central China.
The setup of the branch had received approval from the Civil Aviation Administration of China (CAAC). In the future, Air China will take use Wuhan as a base.
Air China may also sublet aircraft leased by East Star from aircraft fleet and financing solutions provider GE Commercial Aviation Services (GECAS) to its Wuhan branch. It is likely to accept part of the private airway’s jet fleet.
Trading Markets reports that from 2011, Air China will spend more in buying wide-body aircraft, so it needs RMB30 billion in the future three years. Although the company has not gained government loans, it is able to get credits from banks.
Meanwhile, Air China is expanding footholds in east and west China.
The company has announced that it will start to operate express routes from Beijing to Chengdu and Chongqing. The routes will target business traffic. Chengdu will, again, also function as a transit station to Tibet.