China’s second-biggest airline is to launch a new carrier despite a severe global downturn in passengers caused by the coronavirus pandemic.
China Eastern has joined forces with a range of partners including China’s biggest online travel agency Trip.com.
The new airline will be focused on the island destination of Hainan, home to eight million and a free-trade hub.
Some have questioned the timing of the launch which comes as the airline industry struggles to survive.
Government-backed China Eastern will own a majority 51% share in the new carrier, which will be called Sanya International Airlines.
Other backers include Shanghai-based Juneyao Airlines and a unit of Trip.com according to an announcement made to the Hong Kong Stock Exchange on Sunday.
No timeframe was given for the launch of the new airline, which will need regulatory approval.
The partners are hoping to capitalise on Hainan’s growing significance in China. The island is about 30 times the size of Hong Kong and is a popular holiday destination for Chinese tourists.
Chinese president Xi Jinping also wants to turn the island into the nation’s largest free-trade zone.
Beijing has outlined plans to lower the income tax rate on Hainan for selected individuals and companies to 15%, and relax visa requirements for tourists and business travellers.