Hebei Airlines' sale to Xiamen Airlines illustrates the challenges faced by China’s startup airlines

At first blush there are few implications from the sale of Hebei Airlines, a domestic-only airline with a dozen-odd narrowbody aircraft, to Xiamen Airlines. But the transaction in many ways is a reversal of one of China's main aviation trends: a proliferation of start-up carriers. There is a flurry of airline launches as eager and aspirational local governments recognise the value aviation can bring to an economy, plus the prestige.

But the start-ups face a difficult entry environment. Their small size starves them of scale, and the existing shortage of management talent is exacerbated by new start-ups. Hebei Airlines was backed by its local provincial government, but the support waned as the government learned it could get a far greater return by supporting a local base of LCC Spring Airlines rather than attempt to have its own airline.

Hebei Airlines now moves under the wing of Xiamen Airlines, a large and respected carrier. This could presage similar fates for today's start-ups as they feel they need a closer relationship with a larger airline.