U.S. airline, Chinese partner to launch new domestic Chinese airline

BEIJING (AP) - U.S. regional airline Mesa Air Group Inc. and a Chinese carrier said they signed a deal Friday to create the first joint-venture airline to fly domestically within China's booming travel market. The new carrier will start service ahead of the 2008 Beijing Olympics, flying to 11 Chinese cities with 50-seat regional jets, Mesa and its partner, Shenzhen Airlines Ltd., said in a joint statement.

Shenzhen Airlines will have majority control of the new carrier, the airlines said. They did not disclose financial details and said they have not decided on a name for the venture.

Chinese companies in a growing number of industries are taking on foreign companies as strategic investors or joint-venture partners to get access to capital and skills to modernize their operations.

Government rules limit foreign investors to holding a minority stake in companies in industries deemed strategic, such as air travel.

Phoenix-based Mesa operates 199 aircraft with more than 1,300 daily flights to 173 cities in the United States, Canada, Mexico and the Bahamas. It operates under its own name and as America West Express, Delta Connection, US Airways Express and United Express.

Mesa will provide the new Chinese airline with pilot and maintenance support, aircraft sourcing and training, the companies said.

Shenzhen Airlines, headquartered in the southern Chinese business centre of Shenzhen, operates 45 A320 and B737 aircraft on 100 routes in China and Southeast Asia.

© The Canadian Press, 2006