Chinese airlines pioneer new international strategies: JVs to overcome internal limitations

The use of multiple brands and JVs to overcome the antiquated and economic-limiting bilateral air service regime is well established. Malaysia based-AirAsia for example has an affiliate in Thailand to access local routes Thai regulations would not permit it to fly with a Malaysian licence. The model is common with Southeast Asia's LCCs, and present in Latin America with the Viva LCC group. But Latin America is home to multiple JVs from full-service carriers; Colombia's Avianca has a unit in Brazil, to name but one.

Airlines in the world's second-largest market, China, are also forming overseas joint ventures. LCC Spring Airlines has announced Spring Japan while in Jun-2014 regional French carrier Aigle Azur will commenced Paris-Beijing flights after full-service Hainan Airlines purchased a stake.

But whereas other Asian and Latin American carriers establish JVs to overcome external limitations - the bilateral regime's ownership and control restrictions - Hainan and Spring are establishing JVs to overcome the internal limitation of Chinese regulators limiting access to lucrative international routes. This is a new approach to ownership, and may grow even beside gradual international liberalisation efforts.