The Beijing local government has signed a strategic cooperation agreement with Hainan Airlines Group (HNA Group), the parent company of Deer Air. It stated it would invest in Deer Air and also rename the carrier.
With Beijing Capital International Airport as its main hub, Deer Air mainly operates a business jet service and charter flights for tourists. Its fleet includes 19 Airbus A319 jetliners.
The current registered capital of Deer Air is $113.9 million.
A senior executive of Deer Air who did not give his name said Beijing Tourism Group (BTG), a Beijing-based state-owned tourism enterprise, will inject the capital on behalf of Beijing municipal government.
He said the two sides, HNA Group and BTG, are still negotiating the BTG’s amount of investment and the new airline’s shareholding structure. But he said HNA Group will still be the controlling shareholder.
Analysts said the new Capital Airlines will have a profound impact on Beijing’s air transport market.
China Daily said that currently the Beijing market has become a battlefield of China’s three major airlines, China Southern, Air China and China Eastern, and the expert said with the possible extension of the new carrier’s business from business jet service to public transportation service, it may challenge the current Beijing market dominator, Air China.