High Plateau JV: Air China Inner Mongolia

As Chinese airlines expand their operations they often seek to access funding from local governments and to do so they often form joint ventures with them rather than just moving some aircraft to that location. This gives them access to new markets but minimises risks associated with obstructive local government bodies and startup losses. In recent years these regional semi-independent branches of the main carriers have been popping up all over the place including remote Inner Mongolia.

Air China has undertaken several joint ventures which range from nominally independent airlines like Tibet Airlines, to VIP operators like Beijing Airlines to semi-independent airlines like Dalian Airlines. At the same time Air China's parent CNAC has major shareholdings in Air Macau and Cathay Pacific and has assisted in the expansion of regional airlines, Shenzhen and Shandong Airlines respectively, into major national players.

In July 2012 Air China announced that it had formed another joint venture, this time with the local government of Inner Mongolia (Inner Mongolia State Assets Operation Co Ltd) in which it would have an 80% share. Inner Mongolia is a huge area covering 457,000 square kilometres (about 12% of China's land area), which borders Mongolia and has a population of over 25 million. It is setup as an autonomous region as are several areas with high proportions of ethnic minorities. Much of the huge area is a high grassy plateau, which has helped the region to become the nation's largest dairy producer. Mineral and coal mining are also important. The capital city is Hohhot, which means 'Blue City' in Mongolian.

The new airline would be simply known as Air China Inner Mongolia and has a registered startup capital of CNY1 billion (USD$159 million). Air China was to provide personnel to the new company in its formative stages. Often the implementation of service is quite delayed when a new airline is announced and Air China Inner Mongolia did not start services until January 2014. The initial purpose of the new airline was to provide domestic services using Boeing 737s to develop air services in the Inner Mongolian region from Hohhot's Baita International Airport.

Operations began with a single Boeing 737-700, B-5226, transferred to the new airline’s fleet on 31st December 2013 from the Air China fleet. It wears a very impressive livery named ‘Tian jiao-Inner Mongolia’ which translates as ‘Proud son of heaven Inner Mongolia’.

Fleet growth has subsequently been slow with a second aircraft arriving in late May 2014. This was the airline's first 737-800, B-2670 which was at the time a 12 year old veteran of the Air China fleet delivered originally in January 2002. She has since been joined by another 737-800, B-1769, which is a new build aircraft received in June 2015. The small fleet is being used to develop services from Hohhot to destinations such as Chifeng, Changsha, Haikou, Wuhan and Xiamen as well as Beijing.

References

2012 August. Air China launches Inner Mongolia subsidiary. Air Transport World
2012, July. Air China's Inner Mongolia subsidiary approved. China Daily US
Airfleets: Air China Inner Mongolia
2014, June. Air China Inner Mongolia takes delivery of first B737-800. Ch-aviation