Cathay Pacific

Air China buys 31pc of Tibet Airlines

PUBLISHED : Thursday, 04 August, 2011, 12:00am
UPDATED : Thursday, 04 August, 2011, 12:00am

Air China is heading for new heights after buying into Tibet Airlines - which has its headquarters at one of China's highest airports.

Gonggar Airport in Lhasa, home to Tibet Airlines, is one of only a few landing strips in the world located at an elevation higher than 3,000 metres above sea level.

The extreme altitude means low air density, which in turns demands greater thrust from aircraft engines. Only a few mainland aircraft are allowed to fly to into Lhasa, making the air tickets on the leg the most sought-after, especially during the summer season.

After acquiring a 31 per cent stake in the airline from the Tibet Autonomous Region Investment Company for 86.8 million yuan, Air China became the second-largest shareholder in Tibet Airlines.

The airline operates one Airbus A319 on routes from Lhasa to Ali, Chengdu, and Chongqing. A second and third aircraft will be delivered in the next two months and it plans to increase its fleet to 20 aircraft in the next five years.

The co-operation between Air China and Tibet Airlines has expanded to the operational and marketing fields with an announcement yesterday that the two airlines have formed a joint frequent-flyer programme.

The arrangement allows Air China frequent travellers to earn mileage on all scheduled flights operated by Tibet Airlines and redeem tickets on all scheduled flights operated by Tibet Airlines from November 1. It came after a code-share arrangement between the two airlines which allows them to operate the same flight together.

It is not the first time that Air China has bought into provincial airlines originally held by city governments or local investors. In March last year it doubled its stake in Shenzhen Airlines to 51 per cent and two years ago acquired the assets and staff of bankrupt East Star Airlines for a foothold in Wuhan.

Latest industry news, meanwhile, is that two joint venture airlines are in the pipeline. Beijing Airlines, a corporate jet operator formed between Air China and the investment arm of the Beijing government, was granted permission by the Civil Aviation Administration to set up earlier this year, and Dalian Airlines, which will be owned 80 per cent by Air China, secured approval from the regulator last month.