Strait Blessings: Fuzhou Airlines

Major airlines in Europe or the USA that wish to expand operations from a destination usually just negotiate with the airport and local authorities to open a hub. However in China the highly regulated state of the market and complex web of local authorities often means it makes more sense to create a subsidiary, especially when there are lucrative subsidies available and potential joint venture partners. Hainan Airlines parent HNA Group has been especially active in this area and Fuzhou Airlines is one of its recent startups.

Fuzhou Airlines Boeing 737-800 B-1906 Panda Models 1:400 Scale Model Airliner

Fuzhou is a city of over 7 million inhabitants and the capital of the Fujian province located in the South-east of China. Located close to the coast Fuzhou is heavily involved in the activities of the nearby ports at Luoxingta and Guantou. It is served by the Fuzhou Changle International Airport, which was opened in 1997 and handled nearly 9 million passengers in 2013. The airport is a major hub for China Southern's nominally independent subsidiary Xiamen Airlines, which controls over 50% of traffic) and since 2014 also Fuzhou Airlines.

Flight attendants pose prior to Fuzhou Airlines first flight

Fuzhou Airlines is the first airline based at the airport and was set up as a joint venture between Hainan Airlines (60%), Fuzhou State Asset Investment Holding Co Ltd (20%), Century Golden Resources Group and Ningbo Ruitong Network Technology (10% each). It set a record as the fastest new airline to be established in China as from approval by the CAAC on February 12 and granting of a business licence on October 17 only 8 months passed. Operations began on October 30, 2014 with the first flight connecting Fuzhou with Beijing.

Fuzhou Airlines initial network

This speed was possible due to the capital investment from Hainan Airlines, which provided pilots, cabin crew and MRO staff as well as aircraft. Initial equipment utilised a pair of ex-Hainan Airlines 737-800s (B-5430 and B-5503) which were followed swiftly by a third aircraft leased indirectly through Hainan from Icelandair (becoming B-5182). Initial routes connected Fuzhou to Shanghai, Tianjin, Kunming, Haikou, Hefei, Taiyuan, Chongqing and Xi’an. Each plane has 156 economy class seats and 8 first-class seats. During its first month the airline carried 40,000 passengers.

Pleasingly airlines of the HNA Group have been striving towards creating their own identities in recent years following many years of subsidiaries being effectively branded as Hainan Airlines with different titles. Fuzhou Airlines has chosen an attractive red and white scheme as explained by Gan Young Chyan:

'Fuzhou Airlines' logo is a figurative diagram that comprises of the fluid lines of a dragon and phoenix in the shape of the Chinese character for blessings (?) in a red background, which is encased in a disk on the aircraft's tail that looks overall like a Fuzhou duck egg, signifying luck, blessings and happiness to everyone from the airline. Its livery consists of the logo on the tail, a red rope of peace in the Chinese culture just above the base of the body and thin white threads along the body that look like Fuzhou mee sua, signifying peace, happiness and blessings to everyone from the airline management, operations and crew.'

The logo was designed by Fuzhou-born professor of Qinghua University, Huang Wei.

As might be expected for a new operation Fuzhou Airlines reported a loss in 2014 (of USD6.2 million) but expansion continued and by mid-May 2015 5 737-800s were in service. Capacity growth for the airline approached 120% in 2015 and by mid-year the airline was able to announce a profit, albeit a small one of USD400,000. By July 2015 111,000 passengers were being transported a month. In November it was announced that 1.1 million passengers had been carried ion the first year and the airline was beginning to look at opening a secondary base within 5 years. The airline's market share at Fuzhou was up to 10% by December. Traffic growth continues with passengers numbers up 161% to 149,500 by March 2016. The ninth 737 was delivered in July whilst the airline aggressively doubled frequencies on the Beijing route and was able to announce an average load factor of 85%.

By 2020 the airline is suggesting its fleet will consist of 40-50 737s and it will have opened up routes to Korea and Japan. Certainly Fuzhou has shown what is possible when the CAAC and local government are both onboard and is a model to be emulated by the other Chinese majors at other regional hubs. There seems every chance that with the backing of the HNA Group Fuzhou Airlines can continue to compete effectively with Xiamen Airlines in South-east China.

References

Ge, Lena. Sept 2014. Fuzhou Airlines' Logo and Livery Unveiled. China Aviation Daily
2014. Fuzhou Airlines inaugurated. China Daily
Chyan, Gan Yung. Oct 2014. Fuzhou Airlines unveils livery and logo today. Kucinta Setia
Fuzhou Airlines News. CAPA