Mesa lends hand to launch new airline in China

 - January 23, 2007, 11:05 AM

Mesa Air Group will help establish a new Chinese regional airline under a contract it signed in late December with China’s Shenzhen Airlines. The deal gives Mesa a 25-percent stake in the new company, expected to launch service by the end of the year with 50-seat regional jets. The 500 million yuan ($64 million) venture gives Shenzhen Airlines a 51-percent stake as required by Chinese law and Delaware-based Wilmington Trust Corp. the remaining 24 percent.

The route network of the tentatively named Beijing Airlines would include Shenzhen, Beijing, Chongqing, Xiamen, Nanjing, Kunming, Dalian, Shenyang, Xian, Zhengzhou and Nanning. Under the terms of the deal, Mesa will supply pilot and maintenance support, aircraft sourcing and training. The companies have not yet confirmed whether the airplanes involved would come from Mesa’s existing fleet of Bombardier CRJs or perhaps from the Harbin Embraer joint venture, which builds the Brazilian-designed ERJ 145 in China. However, they said the airline will field twenty 50-seat jets before the start of the Beijing Olympic Games in 2008, and within five years expand the fleet to a mix of more than a hundred 50-, 70- and 90-seat airplanes.

Privately held Shenzhen Airlines flies 45 Airbus A320s and Boeing 737s on 100 routes in China and Southeast Asia.