[photopress:air_joy_air.jpg,full,alignright]An alliance between two state-owned companies – AVIC1 and China Eastern Airlines – will form the Xingfu Airlines joint venture which will operate as China Joy Air. It is expected to promote sales support to AVIC1’s 60-seat MA60 and the larger 70-to-110-seat ARJ21 China-made aircraft. The Xi’an-based venture underlines the government’s efforts in promoting China-made aircraft.
According to a statement by the Civil Aviation Administration of China (CAAC) on February 29th, AVIC 1, China’s largest aircraft manufacturer, will hold 60% share of the joint venture while China Eastern Airlines will own the remaining 40%. AVIC1 will invest RMB 600 million in cash, while the remaining RMB 400 million will come from China Eastern.
Li Lei, a Beijing-based analyst at China Securities said that the right to make major decisions like aircraft purchasing is important for AVIC 1 as a newcomer to the airline industry. Li Lei said, ‘The regional carrier can also help complete China Eastern’s existing network.’
The CAAC further said in its statement that China’s aircraft fleet is projected to quadruple to 4,000 aircraft by the year 2020. By then, the aircraft developed by AVIC 1 will be able to compete with planes made by Brazil’s Empresa Brasileira de Aeronautica SA and Canada’s Bombardier.