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Urumqi Air

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Airline Status
In-service
IATA Code
UQ
Date established
29-Aug-2014
Main hub
Urumqi Diwopu International Airport
Country
China
Business model
Low Cost Carrier
Network
Domestic
Airline Group
Part of Hainan Airlines Group (HNA)
Alliance
U-FLY Alliance
Joined Alliance
2016

Urumqi Air is a Chinese low-cost carrier based at Urumqi Diwopu Airport, providing both domestic and regional services. The carrier is a JV between Hainan Airlines, the controlling stakeholder with 70% and Urumqi Urban Construction Investment, holding 30%. Urumqi Air has taken over Hainan Airlines’ operation at Urumqi and is licensed for domestic (including Hong Kong, Macau and Taiwan) and international passenger and cargo services. The airline operates a fleet of Boeing 737 family aircraft.

Location of Urumqi Air main hub (Urumqi Diwopu International Airport)

LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Urumqi Air fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.


 
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7 total articles

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Korea's Eastar Jet LCC joins U-FLY LCC alliance to strengthen position in China and Southeast Asia

31-Jul-2016 12:14 PM

Korean LCC Eastar Jet has become the fifth member of the U-FLY LCC Alliance, established in Jan-2016. Eastar Jet also becomes the first member not affiliated with the HNA Group or based in Greater China. Eastar Jet's membership comes after its larger competitor Jeju Air became a founding member of the competing LCC Value Alliance in May-2016.

For now both alliances are more like commercial partnerships, where new technology (Air Black Box, compatible with IATA's New Distribution Capability) enables the member airlines to cross-sell not just seats, but also the critical components of varied ancillary revenue. Both alliances have small costs – and thus low risk – while the U-FLY Alliance is unique in being a platform for the ever-expansive HNA Group to foster synergies among companies.

Although it is Korea's smallest major LCC, Eastar Jet has the largest LCC operation into mainland China. Eastar expects to benefit from potential cooperation through U-FLY; it will allow it to reach more inland and western Chinese points that are too far or thin for its network, but are where U-FLY's three mainland members are based.

Asian LCC Value Alliance establishes a new direction, using a new connectivity technology platform

10-Jun-2016 6:36 PM

Asia’s LCC sector is further evolving by embracing partnerships and a new loose form of alliances. The newly established Value Alliance and the smaller China-based U-FLY Alliance – launched in early 2016 using the same technology platform – represent a new competitive response to Asia’s leading LCC groups.

Partnerships are critical for unlocking a new phase of growth in the relatively crowded and increasingly competitive Asian market. This is particularly important for independent LCCs that are outside the region’s three major groups – AirAsia, Jetstar and Lion. Value and U-FLY members combined account for approximately 19% of LCC capacity in Asia Pacific; this compares with 16% for AirAsia/AirAsia X, 11% for Lion and 9% for Jetstar.

Of the 53 LCCs based in Asia Pacific, nine are members of the Value Alliance and four are members of U-FLY. AirAsia/AirAsia X has eight affiliates or subsidiaries with a ninth to be launched by the end of 2016. The Lion Group consists of three LCCs and includes Asia’s second largest (along with two full service airlines), while the Jetstar Group has four subsidiaries or affiliates.

HNA Group: four airlines form U-FLY Alliance, world's first LCC grouping, showing HNA consolidation

22-Jan-2016 2:42 PM

China's HNA Group was expansive even before the deals it has made over the past year, where it acquired stakes in various companies including Brazilian airline Azul, the lessor Avolon, the ground handler Swissport and the ride-sharing service Uber. The group became wider but still fragmented, with the companies hardly stitching together to deliver synergies, or at least to avoid competitive overlap.

That will start to change with four HNA airlines forming the world's first LCC alliance, the U-FLY alliance. They operated 67 aircraft at the end of 2015 and project a fleet exceeding 218 by the end of 2020.

U-FLY will be beneficial for HNA. The airlines – HK Express and three from mainland China: Lucky Air, Urumqi Air and West Air – will work together for revenue and cost synergies. In the long term this cooperative action will hopefully spread across the HNA group and integrate it more effectively. The alliance's objective is to "build U-FLY to span the globe, similarly to existing full service airline alliances", and it reflects the ambition and high aspirations that often characterise Chinese aviation. The existing global alliances have attractions that are structurally different to passengers and prospective airline members. U-FLY is likely to provide some cohesion to various HNA LCC brands. Other LCC groups – AirAsia, Jetstar, Viva and FastJet – already benefit from the power of a single brand structure.

China's 19 new passenger airlines will be mostly full service and along the east coast

19-Nov-2014 12:40 PM

One year ago in Nov-2013 China announced the start of a new framework to cultivate new airlines and specifically LCCs. The objectives were to re-stimulate market growth by introducing new types of airlines into the heavy state-owned, and until-now inefficient, airline secotor. A further objective was to bring the humming aviation scene on China's east to western areas that are centres of economic policy drives.

As part of this, a de facto moratorium on new airlines was formally lifted. This has led to a rush of start-up activity. The number of new passenger airlines that have recently launched, plan to or are in formation has reached 19, according to CAPA's compilation based on public statements. But only two airlines – 9 Air/Jiu Yuan and an unnamed carrier in Zhengzhou – are so far planning to operate as LCCs. This reflects hesitation to innovate but also a policy framework that is not yet entirely conducive to LCCs.

There is a better turnout of airlines forming in China's west as well as previously ignored northeast corridor. But there is still a heavy eastern bent to the start-ups, with some planning to launch passenger service in first tier cities like Guangzhou, Hangzhou, Shanghai and Shenzhen.

15 new passenger airlines to launch in China. Though small in size, they will rattle the status quo

3-May-2014 11:30 AM

China in the next year could see about a 50% increase in its number of passenger airlines. There are 15 known airlines that either plan to launch or have launched in recent months. This rapid growth comes as China loosens restrictions on new carriers that have been in place since mid last decade. These new carriers join about 10 airlines launching in other parts of Asia in 2014. Whereas those 10 airlines outside of China are exclusively low-cost carriers, almost all of China's new carriers will be full-service – at least initially.

There is a wave of LCC interest in China accompanied by some regulatory liberalisation, such as on minimum fare pricing. Yet there are more policies that need to be loosened or streamlined, and then upheld in practice. While there is large growth in the number of airlines, their size will be small. Recently-launched Loong Airlines has about 12,000 weekly domestic seats compared to China Southern's 1.7 million. But there will be impacts in the specific markets these new airlines operate in. Their ultimate, long-term potential with a new business model or one free of legacy weight is the larger worry for the country's incumbents, including the behemoths, which are among the world's 10 largest airlines. China's major airlines have been publicly quiet on this market re-ordering but are closely watching it, and planning their own response.

China approves more start-up airlines but they risk being starved of scale in a fragmented market

24-Oct-2013 10:01 AM

Eleven airlines during the past year have announced their intention to launch in China's domestic market. Increasingly, they are being approved (three so far) by regulator CAAC after a few years of a policy that technically forbade new entrants - although there were exceptions, allowing some new airlines to launch.

The new airlines fulfil the objective of creating growth and inviting private capital into the aviation industry as the state grows weary of its large investments across numerous sectors. Space will have to be created for these new airlines in China's ecosystem where 79% of seats are flown by state-owned carriers or their subsidiaries and affiliates. A full 94% of capacity is flown by airlines part of either the Big 3 – Air China, China Eastern or China Southern – or HNA Group. That leaves just 6% of capacity for independent airlines. So the incumbents are not facing an immediate threat, especially as the new airlines are not being based in first-tier cities.

But the additional airlines come as China already has an over-supply of airlines, despite the enormous potential for growth. The fragmentation means few can gain scale and synergies. That situation could be exacerbated by further airline approvals - yet liberalisation is undoubtedly where the system needs to head, creating a dilemma for the CAAC.

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CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.