New Hainan-based airline to be formed.
China is set to launch a new carrier despite a severe global downturn in passengers caused by the coronavirus pandemic.
Sanya International Airlines will be focused on the island destination of Hainan, which Beijing recently announced is planning to turn into a free trade zone.
Government-backed China Eastern Airlines with various partners including the likes of Juneyao Airlines and the country’s biggest online travel agency Trip.com, are behind the launch.
Chinese president Xi Jinping recently outlined plans to lower the income tax rate on the island of Hainan for certain individuals and companies to 15%.
Similar to Macau, visa requirements for tourists and business travellers will be relaxed on the island.
“Once the Hainan free trade port is established, Hainan-based airlines may enjoy favourable policies in terms of taxation, exemption from the tariffs charged on procurement of aircraft and engines and bonded fuel,” one aviation industry analyst said.
No time frame was given for the launch of the new airline, which will need regulatory approval.
Many have questioned the timing of the announcement which comes as a number of high-profile airlines have been struggling to survive during the Covid-19 crisis.
Last week, the International Air Transport Association (IATA) warned that the airline industry could suffer losses of more than $84bn this year.
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