January 8, 2020 / 9:28 AM / 21 days ago

China's Juneyao Air to set up branches abroad in expansion drive

BEIJING/SYDNEY, Jan 8 (Reuters) - China’s Juneyao Airlines plans to set up branches in the United Kingdom, Ireland, Iceland, Malaysia and Greece, the company said in a filing on Wednesday, as it ventures to Europe and Southeast Asia in a global expansion drive.

Juneyao, a private-owned carrier based in Shanghai, has been gradually bolstering its overseas presence after the first delivery of widebody Boeing 787 aircraft in 2018. It started its first long-haul service to Helsinki last June.

With six 787s in its fleet and four more on order, the carrier has said it will add new services to Manchester, Dublin and Iceland from March, all of which will fly through Helsinki.

Its overseas expansion comes amid mounting losses for Chinese airlines on long-haul routes, which hit a combined 21.9 billion yuan ($3.2 billion) in 2018, as the economy slows and trade tensions weigh.

Due to foreign ownership rules, Juneyao will need to find local partners in each of the countries.

“We would not open new international routes blindly, but rather through careful consideration and assessment, and will make decisions based on our own ability and market environment,” Zhao Hongliang, a Juneyao executive told reporters in November.

“We are sure that we will need collaboration. We need international partners.”

Juneyao has a cross shareholding agreement with China Eastern Airlines, which allows it to take a 10% stake in the state-owned carrier.

$1 = 6.9406 Chinese yuan renminbi Reporting by Stella Qiu in Beijing and Jamie Freed in Sydney; Editing by Mark Potter

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