Greater private Chinese airline competition as Hainan's new Fuzhou Airlines tackles Xiamen Airlines

China typically runs its carriers by giving them a base they can develop into a hub where they account for the majority of traffic. Further loosening of that principle will occur in the private sector, where HNA and the Fuzhou City Government will form a joint-venture to launch Fuzhou Airlines in its namesake city, where privately-owned Xiamen Airlines currently represents 50% of capacity.

The launch comes as Xiamen Airlines, arguably the world's most consistently profitable airline, worries if it is breaking the paramount rule of business in China: never be so successful so as to invite a covetous state. In the last two years Xiamen Airlines has posted double-digit operating margins. The creation of Fuzhou Airlines, along China's more developed coastal area, is surprising given recent start-ups have tended to be in more developing regions.