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Airlines

Name: CHENGDU AIRLINES
7JetSet7 Code: UEG
Status: Operational
Region: CHINA
City: CHENGDU
Country: CHINA
Employees 137
Web: bin-wang@chengduair.cc
Email: info@ueair.com
Telephone: +86 28 6683 2359
Fax: +86 28 8570 6199
Sita:
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(definitions)

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UEG-2015-11 - 1st ARJ21-700 Delivery.jpg
UEG-CABIN ATTENDANTS
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UEG-LOGO
UEG-LOGO-2013-07
UEG-VISIT CHINA-A

Formed in 2004 and started operations in 2005. Formerly United Eagle Air, (UE) Air and Eagle Airlines. Scheduled, domestic, passenger, jet airplane services.

Address:
Shuangliu International Airport
6th Floor Aviation Eqmt Building
610202 Chengdu (Sichuan), China

China (People's Republic of China) was established in 1949, it covers an area of 9,560,980 sq km, its population is 1,265 million, its capital city is Beijing, and its official language is Chinese.

Chengdu, is the capital of China's Sichuan province. Chengdu is ranked among China’s top 5 cities with a population of 14 million in its administrative area. The city is known for its giant pandas but also has significant industries including electronics, automotive and aerospace parts, medicine, food and tobacco processing, metallurgy and petroleum.

June 2005: A320-214 (1751, B-6266), ex-Air Jamaica (JAM), (GEF) leased.

July 2005: Launched operations, Chengdu - Shenzhen.

(http://www.ueair.com).

Is owned by a Guangzhou-based computer firm.

Plans to eventually base 15 airplanes in Chengdu.

GECAS (GEF) announced that it is leasing 1 A320 and 3 A319 airplanes to United Eagle Airlines (UEG) based in Chengdu. The A320 is in service with (UEG). The 3 A319s will be delivered to the airline later this year upon redelivery from an airline in the USA.
“We are delighted to add a new customer in (UEG) to our roster of airline clients in China,” said Ms Li Liu, (GEF) Senior VP Marketing. “We continue to redeploy a number of our leased airplanes into countries like China, that have strong traffic growth.”

In 2005, (GEF) has leases or lease commitments for >80 airplanes with 12 different airline customers in China. In addition to leasing aircraft in China, (GEF) completed the largest engine leasing transaction in China in 2004 and provides pilot (FC) training to several airlines there. (GEF) maintains offices in Beijing, Hong Kong and Shanghai.

December 2005: 2 A319-112's (946; 1263), ex-US Airways (USA), (GEF) leased.

February 2006: Chinese domestic airlines flew a record 138 million passengers in 2005, a rise of +15% over 2004 and double the number of 2000. The figure is expected to double again in the next 5 years, according to Gao Geng, the vice minister of the General Administration of Civil Aviation in China. Cargo and airmail throughput rose +14% to 3.04 million tons in 2005 and also is expected to double in the next five years. However, profit margins will remain tight within the sector. He noted revenues in the sector had grown to CNY170 billion/$21.09 billion at the end of 2005, but profits in the past five years had amounted to only +CNY10 billion.

June 2006: China is courting foreign pilots (FC) to keep up with its growing commercial airline industry.

The number of passenger planes in the country is expected to rise from around 800 in 2006 to 1,600 in 2011, according to the General Administration of Civil Aviation of China. Every 100 new planes would require +1,000 extra pilots (FC), China's industry regulator said in February, while official media estimate that Chinese flying schools can only graduate 600 pilots (FC) a year.

United Eagle Airlines Company, LTD (UEG), 1 of the country's 4 private airlines, has hired 3 foreign captains: Belgian Philippe Burtonboy, Pano Pahygiannis from Greece and David Harrigan from the United States (USA). The 3, who previously worked for USA-based Independence Air (BLR) and US Air (USA), had >15,000 hours of accumulated flight time each.

The introduction of overseas staff is aimed at mitigating the shortage of domestic captains (FC), said (UEG) spokesman Hu Wenbin. Sources in the (UEG) said that the annual wage of a foreign captain (FC) is around 800,000 yuan/$100,000, while the average Chinese captain (FC) earns about 600,000 yuan/$75,000.

Last month, China Eastern Airlines (CEA) announced 16 Indians had completed professional training as “air stewardesses,” (CA), the 1st group of Indian cabin staff ever hired by a Chinese airline.

June 2007: Sichuan Airlines (SIC) acquired a 20% stake of Chengdu-based United Eagle Air (UEG).

October 2007: Chinese carriers are beginning to follow the internationally common practice of recruiting privately trained pilots (FC) in an effort to make up for a pilot (FC) shortfall that (CAAC) (CAC) Vice Minister, Gao Hongfeng said last month will reach 2,000 over the next two years. The country's commercial aviation fleet numbered 1,067 airplanes at the end of July, and is expected to rise to 1,250 by 2010. Chinese carriers traditionally cover training expenses for their pilots (FC), which normally runs several million yuan for each individual. As a result, pilots (FC) rarely are able to transfer to competing carriers, as the current employer often asks for heavy compensation from a potential new employer. In addition, the rising number of new entrants is exacerbating the problem. Gao said 39 privately run airlines have submitted applications to the (CAC) since 2004, and 17 have been approved so far. China Southern Airlines (GUN) started the trend in May, announcing its plans to recruit 100 privately trained pilots (FC). Sichuan Airlines (SIC) followed three months later, hiring 50 private pilots (FC). This month Spring Airlines (CQH), East Star Airlines (ESR), and United Eagle Air (UEG) disclosed their interest in recruiting such pilots (FC) in the near future. Shenzhen Airlines (SHZ) has taken it one step further, establishing Kunpeng International Flight School (KIFS) with a CNY30 million investment. (KIFS) will award privately trained pilots (FC) an (ICAO)-recognized license on their graduation, and currently has 120 students. That number is expected to leap to 480 next year. Industry analysts have pointed out that privately trained pilots (FC)'s ability to seek new jobs, when their working contracts expire, or are terminated, will help the market mature and constitute a significant step toward solving the shortage.

March 2008: Hainan Airlines (HNA) is in crisis following the appeal of 6 pilots (FC) to the Haikou arbitration committee to have their labor contracts terminated. The 6 resigned at the end of last year, bringing to 20 the number of (HNA) pilots (FC) who have walked out since 2006. The carrier has accepted none of the resignations and their disputes remain unresolved. Luo Zulin, 1 of the 6 who asked for arbitration, said the resignations were a result of "frequent overtime" and "long delays in getting their salary." (HNA) is insisting on the validity the contracts and denied Luo's accusation regarding pay. It said that if the committee ruled in the pilots (FC)'s favor, it would request several million yuan in compensation from them and the return of their licenses.

Air China (BEJ), China Eastern Airlines (CEA), Xiamen Airlines (XIA), and Xinhua Airlines (XIH) also have faced labor disputes with resigned pilots (FC), largely because Chinese carriers traditionally cover training expenses that can amount to millions of yuan per pilot (FC). There is considerable reluctance to allow them to transfer to competing carriers.

Under a Pilots Flow Management Proposal policy implemented by the (CAAC) (CAC) in 2005, "the potential new employer" of these resigned pilots (FC) must attain the permission of the "old employer" before hiring, then pay compensation of CNY700,000 to CNY2.1 million/$98,300 to $294,800. According to the (CAC) statistics, China's commercial aviation fleet numbered 1,099 airplanes last September 30 and is expected to rise to 1,250 by 2010, leading to an estimated shortfall of -200 pilots (FC) annually.

In order to make up the severe shortage, carriers are beginning to follow the internationally common practice of recruiting privately trained pilots (FC). China Southern Airlines (GUN) started the trend last May, announcing its plans to recruit 100 such pilots (FC). Sichuan Airlines (SIC) followed 3 months later, hiring 50 private pilots (FC). Spring Airlines (CQH), East Star Airlines (ESR), and United Eagle Airlines (UEG) have disclosed their interest in recruiting such pilots (FC).

November 2008: Despite the Chinese government's attempt to ease the burden on airlines by reducing landing fees -20% in March, 29 Chinese carriers had failed to pay about CNY4 billion/$585.1 million combined to airports as of September 30, according to the China Civil Airports Association (CCAA). The (CCAA) noted that domestic airlines owed CNY532 million on February 29, with Hainan Airlines (HNA) in arrears -CNY102.2 million. China's big 3 of Air China (BEJ), China Southern Airlines (GUN), and China Eastern Airlines (CEA) owed CNY45.7 million, CNY64.9 million and CNY44.2 million, respectively. Smaller privately held carriers like East Star Airlines (ESR), Okay Airways (OKA), and Juneyao Airlines (JYA) are debtors as well. The (CCAA) Secretary General, Wang Jian said the defaults mainly comprise fees covering landing, parking and security services. Chengdu-based Eagle Airlines (UEG) reportedly has grounded 2 airplanes, owing to its shortage of liquid capital and severe debt burden. The (CCAA) said Eagle (UEG)'s defaults had reached CNY39.5 million as of February 29.

In order to defend airports' interests, the (CCAA) vowed to "take collective action" against defaulting carriers, but it backed off the stance later and said it had "constructive" talks with the China Air Transport Association, which represents domestic airlines. The organizations agreed to maintain communication in search of a solution.

December 2008: United Eagle Airlines (UEG) provides local jet airplane services in central, southern China.

(IATA) Code: EU - 811. (ICAO) Code: UEA - (Callsign - JINGXIU).

Parent organization/shareholders: E & Net Communications.

Main Base: Chengdu Shuangliu airport (CTU).

Domestic, scheduled destinations: Changsha; Chengdu; Guiyang; Hangzhou; Kunming; Lanzhou; Sanya; & Shenzhen.

February 2009: Shanghai-based, Spring Airlines (CQH) and Juneyao Airlines (JYA) stood out among China's struggling privately held airlines and reported a profitable 2008.

Spring (CQH) posted a +CNY21 million/+$3.1 million net profit last year, down -70% from the more than >+CNY70 million earned in 2007. It credited the result partly to a CNY20 million civil aviation infrastructure payment imposed in the second half of last year. (CQH)'s operating revenue climbed +32% year-over-year to CNY1.62 billion as it transported 2.9 million passengers, up +26%, with an average load factor of 93.3% LF.

Juneyao Airlines (JYA) posted a +CNY11.5 million net profit in 2008. It carried 1.4 million passengers.

In contrast to (CQH) and (JYA), other privately run carriers are suffering from capital shortages and struggling to survive in the difficult operating environment. Unlike state-owned airlines, they are unable to secure financial aid from the government. Wuhan-based, East Star Airlines (ESR) and Chengdu-based, United Eagle Airlines (UEG) are unable to pay significant bills owed to certain airports, while Tianjin-based, Okay Airways (OKA) suffered a -CNY200 million net loss in 2008.

Industry analysts assert that most private airlines will have no other option but to merge with the bigger domestic carriers. United Eagle (UEG) is seeking strategic investors for a CNY100 million capital injection while East Star (ESR) has had initial discussions with Air China (BEJ) parent, China National Aviation Holding Company about a stake sale.

March 2009: Chengdu-based, United Eagle Airlines (UEG), a privately held carrier, agreed to merge with Sichuan Airlines (SIC) through the sale of a 56% stake for CNY200 million/$29.2 million. The deal comes days after another struggling private airline, East Star Airlines (ESR), rejected a purchase offer from Air China (BEJ) parent, (CNAC) and was suspended by Chinese regulator (CAAC) (CAC). (SIC)'s stake in (UEG) has increased to 76%. (SIC) is controlled by the local government (40%) and China Southern Airlines (GUN) (39%). The remaining 24% of (UEG) is held by 5 private companies led by Chengdu Huaying Investment Consultation (15.1% worth CNY45.4 million).

A (SIC) insider said that (SIC) aims to be better positioned in its home market because China Eastern Airlines (CEA) and Shenzhen Airlines (SHZ) plan to enter the area soon. (SIC)'s "deeper cooperation" with (UEG) will focus mainly on regional transport.

Launched in July 2005, (UEG) has registered capital of CNY80 million and operates 3 A319s and 2 A320s on 17 domestic routes. Owing to its small fleet, scattered ownership structure and the difficult external operating environment, it has suffered heavy losses and carries a debt burden. In December 2008, Chengdu Shuangliu International Airport stopped providing service to it because of CNY30.5 million in unpaid landing and ground service fees.

The spokesperson said that (UEG) will use the CNY200 million to pay off its debts and expand its business with new routes and fleet additions. It plans to launch Chengdu - Lijiang flights on March 28 and will resume all routes it had to suspend earlier this year. In addition, it expects to take delivery of an A320 in July.

May 2009: Chinese carriers had failed to pay bills totaling about CNY1.87 billion/$273.6 million combined to 32 airports as of December 31, according to the China Civil Airports Association (CCAA). Domestic carriers blamed "financial difficulties" for the defaults, which comprise mainly landing, parking and security fees. (CCAA) Secretary General, Wang Jian said he was unsatisfied with that explanation, pointing out that airport charges account for no more than 12% of airlines' operating expenses and exert minimal impact compared to fuel, which comprises 40% to 50%.

The (CCAA) said carriers are asking for discounts and Wang said, "most airports have refused this request. Since air transport volumes keep rising, why should airports give a discount? It doesn't make any sense based on supply and demand," he argued. "Last year Chengdu Shuangliu punished United Eagle Airlines (UEG) by suspending service owing to (UEG)'s default, which is a good example." He revealed that other airports are planning to take similar action.

August 2009: A320-214 (1751, 6Y-JMJ), returned to (GECAS) (GEF) and leased to Air Jamaica (JAM).

October 2009: The Commercial Aircraft Corporation of China (CCC) agreed to purchase a 48% stake in Sichuan Airlines (SIC) subsidiary, United Eagle Airlines (UEG) in order to facilitate the sale of its ARJ21 and C919 airplanes. The (CCC) will invest CNY1 billion/$146.3 million in Chengdu-based, United Eagle (UEG), which under terms of the agreement will order 30 ARJ21s after the stake sale is concluded.

(SIC) acquired 76.2% of (UEG) for CNY200 million 6 months ago as (UEG) was on the verge of bankruptcy. Owing to (CCC)'s investment, Sichuan (SIC)'s stake will be reduced to 40.97%. Sichuan Communication Investment Group will hold the remaining 11.03%.

(UEG) is expected to take delivery of its 1st ARJ21 at the end of 2010. It currently operates 7 A320 family airplanes on 35 domestic routes and is expected to add an 8th airplane at year end.
(UEG) plans to rely on the A320 and ARJ21 in the short term, "but we will phase out the A320s gradually and replace them with C919s for the long term," a Sichuan spokesperson said. (UEG) noted it will continue to help (UEG) with capacity control, operational management, Maintenance Repair & Overhaul (MRO) and human resources.

(SIC) was the 1st carrier to introduce the A320 into the Chinese market in the 1990s. It also took delivery of the 1st A320 assembled at Airbus (EDS)'s Tianjin final assembly line in June. Similarly, (AVIC) launched Joy Air (JOY) with 3 MA60s in August. (JOY) is expected to introduce +3 more MA60s by year end and plans to acquire 50 of the type, plus 50 ARJ21s, over the next 8 years.

SEE ATTACHED "FLIGHT INTERNATIONAL" ARTICLE ON (COMAC) (CCC) STAKE IN (UEG) - - "UEG-COMAC-2009-11."

January 2010: United Eagle Airlines (UEG) will re-launch as a state-owned carrier and will be renamed "Chengdu Air." In October, Commercial Aircraft Corporation of China (CCC), manufacturer of the ARJ21 and C919, purchased a 48% stake in loss-making (UEG) from Sichuan Airlines (SIC) for CNY1 billion/$146.3 million. (SIC)'s stake was reduced to 41% and Sichuan Communication Investment Group holds the remaining 11%. (SIC) is controlled by the provincial government and China Southern Airlines (GUN). (UEG) currently operates six A319s and one A320 on 35 domestic routes. The new airline, which has placed an order for 30 ARJ21s, will focus on regional operations. It will take delivery of its 1st ARJ21-700 at the end of 2010.

June 2010: Sichuan Airlines (SIC) is expected to increase its stake in troubled Dongbei Air to 97% from its current 33.5% holding, another example of the growing trend of China's few privately run airlines being taken over by state-owned carriers.

(SIC) Chairman, Lan Xinguo noted that the stake purchase still must receive government approval and "hopefully will be approved by relevant government organs soon." He didn't reveal how much Sichuan (SIC) would spend to effectively take over Dongbei, but insiders estimated it would invest about CNY101.6 million/$14.9 million.

Launched in February 2006, Dongbei initially was based at Shenyang Taoxian. Private enterprise Shenyang Zhongrui Investment Company holds a 34% stake while the Shenyang government and Liaoning Huanjiang Property Company each hold 16.25%.

Hit hard by the global financial crisis and management missteps, Dongbei has been suffering from operating losses since its launch. It transferred its operating base from Shenyang to Guilin in Guangxi Province last December, a move widely speculated to have been made to pave the way for a capital injection.

It will not be the 1st time (SIC) has taken over a privately run airline. It took control of United Eagle Airlines (UEG) by investing CNY200 million last year. Last October, the Commercial Aircraft Corporation of China (CCC) purchased a 48% stake in (UEG) from (SIC) in order to facilitate the sale of its ARJ21 and C919 airplanes. (UEG) changed its name to Chengdu Airlines (UEG). Lan predicts Chengdu (UEG) will earn a profit this year owing to the domestic market's strong rebound.

September 2011: The Commercial Aircraft Corporation of China (COMAC) (CCC) may postpone its first ARJ21 delivery to Chengdu Airlines (UEG), according to an industry insider, who said some key parts haven’t passed flights tests. The ARJ21 is scheduled to be delivered at the end of the year.

A (UEG) spokesperson said that (UEG) has not been informed of any delivery delay and was moving forward with the original delivery plan.

(COMAC) (CCC) is the majority (UEG) stakeholder with a 48% holding, while Sichuan Airlines (SIC) holds 40.97%.

(UEG) was launched in 2004 as United Eagle Airlines (UEG). In March 2009, Sichuan Airlines (SIC) invested $30 million in (UEG), for a 76% stake. In late 2009, these shares were sold to (COMAC) (CCC) and the Chengdu Communications Investment Group. Following this ownership change, (UEG) placed a firm order for 30 ARJ21s. In January 2010, the airline was renamed Chengdu Airlines (UEG).

The ARJ21, which to date has received 340 orders, is in the test-flight phase to gain (CAAC) (CAC) certification. It is working toward gaining (FAA) certification, paving the way to put its international marketing plan into action.

October 2011: Chengdu Airlines (UEG) has confirmed that Commercial Aircraft Corporation of China (COMAC) (CCC) has pushed its 1st ARJ21 delivery into next year. The delivery, originally scheduled for November 28, was reportedly delayed owing to the inability of some key parts to pass flight tests, according to an industry insider.

The ARJ21, which has received 340 orders, is in the test-flight phase to gain (CAAC) (CAC) certification. It is working toward gaining (FAA) certification, paving the way to put its international marketing plan into action.

(UEG) said the ARJ21 delivery delay will not affect its normal operations and plans to introduce 1 A320 next month to make up for the delay.

November 2011: A320-214 (4347, B-6850), (GEF) leased, ex-(OE-IBB).

February 2012: A320-214 (5003, OE-LEI), bought from Niki (NKI).

June 2012: A320-200, (GEF) leased delivery. (GECAS) (GEF) was 1 of the 1st lessors to work with Chengdu Airlines (UEG), which started operations as United Eagle Airlines in 2005. Today, (GEF) leases 9 airplanes to (UEG), which operates domestic passenger service from its base in the capital of the Sichuan Province.

August 2013: Check out Chengdu development:

October 2013: Chengdu is currently in the sights of several airlines.
Qatar Airways (QTA) launched an A330 service to the city airport (CTU) from Doha (DOH) on September 3. British Airways (BAB) links Chengdu with London Heathrow (LHR) using 777-200ERs from September 22.
United Airlines (UAL), having received USA Department of Transport (DOT) clearance, is now seeking Chinese approval to fly to the city from San Francisco (SFO) by 787 from next June.

Chengdu is set to play a critical role in the next wave of economic development in Western China. It is hardly a surprise, therefore, that nearly half of the world’s Fortune 500 companies have opened offices in the city, and that Chengdu is aiming to become China’s fastest growing aviation hub. Last year, Chengdu Airport saw traffic growth of +8.7% to 31.6 million passengers. Chengdu, is the capital of China's Sichuan province and is ranked among China’s top 5 cities with a population of 14 million in its administrative area. Although the city is known for its giant pandas, it also has significant industries, including electronics, automotive and aerospace parts, medicine, food and tobacco processing, metallurgy and petroleum.

China Aircraft Leasing (CALC) has purchased an A320 for Chengdu Airlines (UEG) lease with (CFM56-5B4/3) engines from (GECAS) (GEF).
The 2012-vintage airplane (5252) has been operated by Air Berlin (BER) since new. It will be placed on lease to (UEG) from November onwards.

The transaction follows the acquisition of a new A320 from Austrian carrier Niki (NKI) for forward lease to Chengdu Airlines in February 2012. The airplane is on lease to (UEG) for 12 years.

The transaction marks the 6th time that (CALC) places an A320 with Chengdu. In 2011, Chengdu agreed to lease 4 A320s from (CALC). The 2005/06-vintage airplanes were previously operated by Air Berlin (BER).

Chengdu Airlines (UEG) has 2 A319s on lease from China World Aviation Leasing and 1 from (GECAS) (GEF). Its 8 A320 fleet includes 6 airplanes from (CALC) and 2 from (GECAS) (GEF).

A320-214 (5252, B-9985), ex-AirBerlin (BER), ex-(D-ABNC), China Aircraft Leasing leased.

January 2014: The 1st 2 ARJ21-700s (China's 1st home made regional jets developed by the Commercial Aircraft Corporation of China, Ltd (COMAC) (CCC)) were rolled out from the final assembly line in Shanghai Aircraft Manufacturing Factory Company, Ltd on December 30. The 2 airplanes will be delivered to launch customer, Chengdu Airlines (UEG) next year, marking that China has its home made passenger jet for the 1st time.

The ARJ21-700 regional jet is not only China's 1st airliner independently designed in accordance with international standards, but also the 1st one to apply for airworthiness certificates from both the (CAAC) and the Federal Aviation Agency (FAA). Configured with 5-seats per row cabin layout, the regional jet has a standard range of 2,225 km. For the extended type, the range can be increased to 3,704 km. With 252 orders, the regional jet has received all the required certification. It has completed 2,200 safe takeoffs and landings, as well as >4,200 hours of flying.

In May 2013, the ARJ21-700 (105) was transferred to the final assembly factory of (COMAC). This is the 1st ARJ21-700 to be delivered to Chengdu Airlines (UEG) in 2014.

China's larger airplane, the C919 has achieved impressive progress. The C919's "iron bird" rig, a ground-based test platform on which a new airplane's systems are tested, was officially put into operation, marking the launching of system verification. In 2014, the 1st C919 test airplane will move into the assembly line.

After the 1st delivery of the ARJ21 airplane, the company will strive to complete certificate verification in 2014, making good preparation for marketing, according to (COMAC). The C919 airplane will make its maiden flight before the end of 2015. Currently, the C919 has won 380 orders from 15 customers home and abroad, including some foreign customers.

Comac (based at Shanghai Pudong) (CCC) is set to deliver its 1st ARJ21-700 to launch customer, Chengdu Airlines (UEG), in either late 2014 or early 2015. With 30 of the type currently on order, Chengdu will deploy the ARJs into service in April/May 2015, though this date is contingent on the type passing its test flights and attaining its airworthiness certificate. "We will initially fly to airports with stronger organization and coordination ability, and seek for cooperation with more regional airports in medium and long terms," Luo Yu, Chengdu Airlines' Deputy General Manager said.

February 2014: The Commercial Aircraft Corporation of China (COMAC) (CCC) is establishing a branch company in Chengdu, capital of southwest China's Sichuan Province, which will become an operational resource center for its large airplane C919, covering Personnel Training, Customer Services, and others. Zhuang Haogang, (CCC)'s General Counsel and Chairman of Chengdu Airlines Company ((IATA) Code: EU) (UEG) will be in charge of preparing for the (COMAC) (CCC) Sichuan Branch.

According to staff from Shanghai-based (COMAC), since the ARJ21 will be delivered to Chengdu Airlines (UEG) before the end of this year, the manufacturer needs to do some airplane maintenance, repair, troubleshooting and other maintenance actions; meanwhile, there are some cooperative projects with (AVIC) Chengdu Aircraft, it is necessary to establish a Chengdu Branch. Chengdu Airlines (UEG) has been joining supervising production of the home-made large airplane C919 and staff training. For example, pilots (FC) and dispatchers of the C919 and ARJ21 will take training in Chengdu Airlines (UEG). The (COMAC) Sichuan Branch will build an overall resource support center including technical talented staff (MT) and spare parts contributing to the large passenger airplane C919 that will soon be soaring through the blue skies.

Establishing a sophisticated aviation industry chain in Sichuan is the main reason for this decision. Sichuan Airlines (SIC) has signed a purchase agreement for 20 C919s and Chengdu Airlines (UEG) will operate the maiden flight of (COMAC)'s regional airplane, the ARJ21. Both of them are customers of domestic large passenger airplanes. On the other hand, in the field of airplane manufacture in its upper levels, (AVIC) Chengdu Aircraft Industrial (Group), is to become an important part supplier of the C919, by taking the responsibility of producing the C919s and ARJ21s. What's more, as China's 4th largest aviation city, Chengdu enjoys a promising future in terms of the civil aviation market. Therefore Chengdu is the best choice by (COMAC) for building a branch company.

As the main vehicle in implementing large passenger airplane programs in China, (COMAC) has been making increasing investment in Sichuan in recent years. As early as 2009, (COMAC) signed an agreement with Sichuan Airlines (SIC) and the Chengdu Communications Investment Group Company to reconstruct the loss-suffering United Eagle Airlines, which was later renamed as Chengdu Airlines (UEG). At that time, (COMAC) became a major shareholder of the Chengdu-based airline (UEG) with a 48% stake. In September 2013, Chengdu Airlines (UEG) signed a cooperation framework agreement on the C919 program with (COMAC), marking a comprehensive cooperation between the two parties. Chengdu Airlines (UEG) became an important part of the domestic large passenger airplane program. During the 2013 Fortune Global Forum in Chengdu, (COMAC) inked an investment framework with the local government on civil aviation customer services and an industrial park project, which laid the foundation for constructing a demonstration base for home-made ARJ21 airplanes.

April 2014: Sichuan province capital, Chengdu opened 70 passenger and cargo flights to foreign countries and regions by the end of last month, including 32 scheduled direct routes, the "Chengdu Daily" reported. The inland city used to suffer poor transportation connections with elsewhere but is now expecting far more communication and cooperation with international cities through its advanced aviation network.

By 2015, Chengdu plans to build itself into an international aviation hub with 36 international direct routes carrying 50 million passengers annually. Chengdu opened 4 international direct services this year, linking to Melbourne, Frankfurt, Doha, and London.
"United Airlines (UAL) will launch a direct flight between Chengdu and San Francisco in June next year." The service will be the 1st direct flight between the USA and western China. Ticket bookings opened at the beginning of November. "The local government is already planning next year's new routes, linking Chengdu to other international cities including Istanbul, Moscow, Paris and Dubai."
The Chengdu Shuangliu International airport is also considering a direct route to Africa.

The airport handled 31.6 million passengers last year, ranking 4th in China in terms of passenger volume. Chengdu is also the 4th city on the Chinese mainland to adopt a 72-hour visa-free policy. A total of 245 "Fortune Global 500" companies had bases in Chengdu by the end of October.

May 2014: Comac (CCC) said it is ready to deliver China's 1st homegrown regional airliner and should complete a bigger plane in 2018. The 1st 2 of the ARJ21-700 regional jets have been completed for a Chinese carrier, Chengdu Airlines (UEG), and are coming to the end of the certification process, according to Commercial Aircraft Corporation of China (CCC). The company said it has 252 orders.

China launched the ARJ21 project in 2002 in an attempt to break into the Western-dominated airplane market. The plane was promised for 2007 but delivery was pushed back due to technical problems.

China is expected to become 1 of the world's biggest airplane markets over the next 2 decades. The Boeing Company (TBC) forecasts total demand at 5,580 planes worth a total of $780 billion.

The ARJ21-700 can seat 78 to 90 passengers depending on its configuration, with a range of 2,225 to 3,700 km/1,300 miles to 2,300 miles. Comac (CCC)said it successfully completed test flights in North America in March and April and has flown 13,000 km/8,000 miles.

The company is targeting China's domestic market and flights to SE Asia. "We 1st want to develop our business in China and then gradually we will go to the international market," Comac (CCC) executive Tian Min told reporters at Comac's assembly and manufacturing center in Shanghai.

Comac (CCC)'s larger C919 is a single-aisle jet meant to compete with Boeing (TBC) and Airbus Industrie (EDS). It can seat up to 168 passengers and has a planned range of 4,000 to 5,100 km/2,500 to 3,200 miles.

The C919 is an official initiative "for China to re-capture the value in airplane manufacturing that currently goes offshore to Airbus and Boeing," said industry analyst Will Horton of (CAPA) Center for Aviation. "With such a large objective, accomplishments will come gradually."

(CCC) has received 400 orders from 16 customers, including airplane leasing company (GE) Capital Aviation Services (GEF). Low cost carrier Ryanair (RYR) and British airlines have signed memorandums of understanding (MOU)s about their intention to purchase planes, Tian said.

He wouldn't disclose price but said developers were focused on controlling costs. Most orders have come from China's state-owned airline industry under government instructions to support the program.
"Global aviation remains pessimistic on the C919, given the ARJ21 delays," said Horton.

On May 15, the 1st front fuselage of a C919 was delivered by a supplier to Comac (CCC), Tian said. He said the plane will be assembled in the 2nd half of 2014, its maiden flight is due at the end of 2015 and the 1st delivery to a customer is slated for 2018.

Longer term, Comac (CCC) is cooperating with Russia to build a next-generation wide-body plane. The 2 sides signed a memorandum of understanding (MOU) during Russian President Vladimir Putin's visit to China. Tian said Comac (CCC) is working on a feasibility study with Russia.

From its beginning in 2008, Comac (CCC) has focused on developing the 2 passenger planes. It has grown from 3,800 employees to 8,300.

Earlier news reports said the C919 maiden flight was due in 2014, with delivery in 2016. Tian said those reports were wrong, and Comac (CCC) always planned for its maiden flight to be 90 months from the project launch.

February 2015: Chinese carriers are expanding operations to Chengdu, hoping to gain a larger market share to take advantage of its greater market potential.

March 2015: The new Chengdu airport will start construction by the end of this year, said Tang Limin, Director Sichuan National Development & Reform Commission (NDRC).

The new airport will built with a total investment of 69.26 billion yuan, located near Lujia town of Jianyang city, 51.5 km away from the center of Chengdu city. The airport will have 6 runways, with the capacity to handle 90 million passengers per year. In the initial period, 3 runways will be constructed, aiming to handle 40 - 45 million passengers annually. Then, as the passenger flow increases, it will add +3 runways, boosting its capacity to 90 million people.

Including 40 million people, the capacity of Chengdu Shuangliu International Airport (CTU), Chengdu would handle 130 million air passengers every year.

The new airport's terminal will occupy an area nearly 1.8 times of the Terminal 2 of Chengdu Shuangliu International Airport (CTU). Among all domestic airports being planned and constructed, the new regional airport will rank as 2nd only after Beijing's new airport in terms of facility scale.

Upon the completion of its new airport, Chengdu will be the 3rd city owning 2 airports in China after Beijing and Shanghai.

June 2015: News Item A-1: Chengdu Airlines (UEG) took delivery of its 17th Airbus aircraft on July 1, with an A320 aircraft landing smoothly at Chengdu Shuangliu International Airport (CTU) at 3:50 pm.

The new A320 aircraft departed Munich, Germany on June 30 and flew to Chengdu after a stopover in Tianjin on July 1. It is equipped with 180Y all economic seats.

Chengdu Airlines (UEG) is scheduled to deploy the new aircraft on domestic services from July 15, in a bid to bring more capacity for the summer travel peak.

Moreover, the regional airline will resume and launch several routes in this summer, to facilitate travel for local citizens.

News Item A-2: Check out developments in Chengdu City:

July 2015: News Item A-1: "Chengdu Set to Take Off with New Airport" By Li Fusheng, "China Daily" July 10, 2015.

The present Shuangliu International Airport in Chengdu has 244 routes to 119 Chinese cities and 71 overseas destinations - - see attached chart - - "UEG-2015-07 - Chengdu Airport Destinations.jpg."

The airport saw 37.5 million passengers pass through in 2014, ranking it 5th among all 202 civil airports on the Chinese mainland. The figure is expected to reach >40 million this year.

Local officials said a new and larger airport will be built and more international air routes will be available, making Chengdu (as Sichuan Province's capital), even more closely connected to countries around the world.

The new airport will be located 31 miles southeast of downtown Chengdu and will be much larger than Shuangliu International Airport.

The facility will make Chengdu the 3rd city on the Chinese mainland to have a 2nd airport, after Beijing and Shanghai.

The 1st phase of the new airport will be finished by 2018, with annual capacity to handle 40 million passengers and 700,000 metric tons of cargo. The long-term goal is for the airport to handle 90 million passengers and 2 million metric tons of cargo annually.

Highways, subways and intercity railways are also planned to link the new airport to downtown Chengdu and other parts of the city.

The General Manager of the Sichuan Province Airport Group, Pan Gangjun, said the new airport would mainly serve international routes, while Shuangliu International Airport will handle domestic flights. "Shuangliu Airport is positioned as a regional aviation hub, while the new airport aims to become the 4th major national-level international hub," he said.

The construction of a second airport will help create an "air Silk Road" to Europe, said Tang Limin, Director of Sichuan's Development & Reform commission.

Located in the core of Southwest China, the new airport could develop into the largest one on the Silk Road Economic Belt and the Yangtze River Delta Economic Zone, and become China's gateway to Europe, South Asia, SE Asia, Central Asia, and the Middle East, Pan said.

Chengdu already has the largest number of international routes in China's central and western regions.

The city operates 83 international routes to destinations around the world, including San Francisco, London, Frankfurt, Doha, and Melbourne.

On May 2, Sichuan Airlines (SIC) launched direct routes from Chengdu to Moscow, making it the 1st city in Southwest China to offer direct flights to the Russian capital.

British Airways (BAB) and (KLM) Royal Dutch Airlines promoted their nonstop service between Chengdu and Europe in late May.

United Airlines (UAL), which operates the only direct route between western China and the USA, runs a daily nonstop service from Chengdu to San Francisco. In addition to air transport, Chengdu connects to Europe by an express railway. The rail route, which roughly follows the ancient Silk Road, sets out from Chengdu to Lodz, Poland, 9,826 km away.

Items ranging from shoes to auto parts and computers are collected from Chengdu and other parts of the country and shipped overland to Europe in 12 days. Chengdu now produces 20% of the world's computers and two-thirds of the globe's iPads. Half of the world's laptop computer chips are also encapsulated and tested in the city.

The express rail is part of Chengdu's efforts to turn itself into an international transport hub and realize its goal of becoming China's western gateway, officials said. The line is an artery for economic exchanges between the continents of Asia and Europe and influences the development of China's western region, Europe, and Russia.

Since the launch of the Chengdu - Europe express railway in April 2013, commodities worth $580 million have been exported to Europe.

With its location at the intersection of the Silk Road Economic Belt and the Yangtze River Delta Economic Zone, Chengdu itself is "running on a fast track" just like the express, said a local official.

News Item A-2: An Airbus A320 aircraft of Chengdu Airlines (UEG) landed smoothly at Chengdu Shuangliu International Airport (CTU) on July 18 at 2:29 pm, marking that (UEG) received its 2nd Airbus aircraft this month, expanding its fleet size to 18.

The 180Y-seat all-economy aircraft will be put into operation from August 1, enhancing (UEG)'s operating capacity in the summer travel rush.

2 A320-214 (4743, B-8162; 4988, B-8186), ex-(D-ABFU & D-ABFZ), (GEF) leased.

August 2015: A320-214 (5191, B-8185), ex-(D-ABNA), (GEF) leased.

November 2015: "China's First Home-Made ARJ21-700 Delivered to Chengdu Airlines November 29, 2015" by Louis Ye, WCARN.com.

The Commercial Aircraft Corp of China (COMAC) (CCC) delivered its ARJ21-700, the country's 1st indigenously designed regional jet with a registration number of (B-3321), to Chengdu Airlines (UEG), marking an end to the 12-year research and development of the ARJ21 Program and also bringing the commercial flight of homegrown aircraft into a new era.

The ARJ21-700 jetliner flew from Shanghai and arrived at the Chengdu Shuangliu International Airport at 1:15 pm Beijing Time. (CCC) and (UEG), the launch customer of the jet, held a grand ceremony at the airport to celebrate the settlement of China's first self-developed regional jet in Chengdu, the capital of the southwestern Sichuan Province.

"The ARJ21-700 helped China accumulate experience in the research and development of commercial aircraft and also build up its capabilities in the airworthiness certification of commercial aircraft," said Luo Ronghuai, the General Director of the ARJ21 Program.

"The aircraft will be officially put into commercial service in the first quarter next year and will fly on routes from Chengdu to 7 popular domestic destinations, including Beijing, Shanghai, Guangzhou, Xi'an, Nanjing and Shenzhen."

"The ARJ21-700 delivered today features an all-economy (Y) cabin configuration and seats up to 90Y passengers."

(COMAC) (CCC)'s data shows it has so far received >300 orders for the ARJ21-700, including 3 for the Republic of Congo.

June 2016: Chengdu Airlines (UEG) is ready to launch its 1st ARJ21-700 commercial passenger service on Tuesday, June 28, seven months after taking delivery of the aircraft, the ARJ21 launch customer announced on June 27 in a press conference.

(UEG), the Chengdu-based carrier said, the homegrown regional jet ARJ21-700 will take its 1st commercial flight from Chengdu to Shanghai Hongqiao on Tuesday morning, June 28.

The Chengdu - Shanghai Hongqiao service will be offered 3x-weekly on Tuesdays, Thursdays and Saturdays. The inaugural flight EU6679 is scheduled to depart from Chengdu Shuangliu International Airport at 9:10 am and land at Shanghai Hongqiao International Airport at 11:50 am; with the return flight EU6680 leaving Shanghai at 1:10 pm and reach Chengdu at 4:25 pm, according to VariFlight, China's leading flight status service provider.

The inaugural flight will be piloted by Deputy General Manager of Chengdu Airlines, Zhang Fang, Deputy Chief Pilot, Liu Bo, and Deputy Chief Security Officer, Li Jianguo.

As the launch customer of the ARJ21, (UEG), the Chengdu-based carrier received the 1st of 30 ARJ21-700 (B-3321) from the Commercial Aircraft Corp of China (COMAC) on November 29, 2015. The 2nd ARJ21 is expected to be delivered to (UEG) in August.

Chengdu Airlines (UEG) plans to fly the 1st of its 5 ARJ21s on 7 domestic routes from Chengdu to Shanghai, Beijing, Guangzhou, Shenzhen, Xi'an, Nanjing, and Guiyang, to ensure it can handle safe and reliable operations, as well as to build customer awareness of the indigenous aircraft.

(UEG) also predicted its fleet will be expanded to 52 aircraft by 2018, with annual passenger volume reaching 10.6 million.

August 2016: A320-214 (7111, B-8606), ex-(B-000H) delivery.

October 2016: Chengdu Airlines (UEG) took delivery of its 2nd ARJ21-700 (105); the aircraft is configured with 78 seats in 2 classes.

A320-214 (7211, B-8608), ex-(B-000Q) delivery.

November 2016: News Item A-1: Hainan Airlines (HNA) announced on November 28 that its subsidiary, Yunan Lucky Air (LKY) is planning to set up a new carrier in Chengdu, capital city of SW China's Sichuan Province.

Lucky Air (LKY) will partner with local state-owned companies to invest 3 billion yuan in the new Chengdu Shenniao Airlines, which could become the 8th base carrier at Chengdu Shuangliu International Airport following Air China (BEJ) Southwest Brance, Sichuan Airlines (SIC), Chengdu Airlines (UEG), Tibet Airlines (TBZ), China Eastern Airlines (CEA) Sichuan, Shenzhen Airlines (SHZ) and Lucky Air (LKY).

(LKY), the Kunming-based carrier expects to invest up to 1.05 billion yuan in the joint venture (JV) and will own up to 35%. Yunnan Xiangpeng Investment Company, Ltd and Chengdu Communications Investment Group Company, Ltd. will hold 45% and 20% stakes in the new airline with 1.35 billion yuan and 600 million yuan, respectively.
Based at Chengdu Shuangliu International Airport, the proposed airline will be a low cost carrier (LCC) operating domestic and international flights.

Hainan Airlines (HNA) said that the new proposed Shenniao Airlines aims to enhance its presence in Sichuan Province and increase its market shares in the region, so as to make profits. Shenniao Airlines becomes the latest in a series of new Chinese airlines launched by the (HNA) Group in recent years. Others include Fuzhou Airlines (FZH) in Fujian province, Urumqi Airlines (URQ) in the Xinjiang region, and GX Airlines (GXB) in Guangxi region. It has also created a new passenger airline in Shanghai, with the expansion of former cargo carrier Yangtze River Airlines (YTH).

February 2017: A320-232 (5875, B-1826), ex-(B-OOOR) delivery.

May 2017: A320-214 (7531, B-8878), ex-(B-OOOQ) delivery.

Fleet:
(definitions)

Click below for photos:
UEG-A320
UEG-ARJ21-700-2011-01

September 2017:

3 A319-112 (CFM56-5B6/P) (946, /99 B-6152; 949, /99 B-6155; 1263, /00 B-6151), EX-(USA), (GEF) LSD. 12C, 108Y.

1 A319-112 (CFM56-5B6/P) (2774, /06 B-6230), 2009-08. 12C, 108Y.

2 A319-115 (CFM56-5B7) (2762, /06 B-6229; 3024, /07 B-6163), 12C, 108Y.

14 ORDERS A320-200:

0 A320-214 (CFM56-5B4) (1751, /02 B-6266), EX-(JAM), (GEF) LSD 2005-06. RTND & LST (JAM) 2005-08. 12C, 138Y.

4 A320-214 (CFM56-5B4), 2 DELIVERED 2015-07.

1 A320-214 (CFM56-5B4) (2654, /05 B-6900), EX-(D-ABDE). EX-(BER) 2012-01. 12C, 138Y.

1 A320-214 (CFM56-5B4) (2696, /06 B-6728), EX-(D-ABDE). EX-(BER) 2010-10. 12C, 138Y.

1 A320-214 (CFM56-5B4) (2820, /06 B-6729), EX-(D-ABDF), EX-(BER) 2011-01. 12C, 138Y.

1 A320-214 (CFM56-5B4) (2835, /06 B-6730), EX-(D-ABDG), EX-(BER) 2010-10. 12C, 138Y.

1 A320-214 (CFM56-5B4) (3706, /08 B-6940), EX-(OE-IAC), EX-(NKI), (GEF) LSD 2012-06. 12C, 138Y.

1 A320-214 (CFM56-5B4) (4347, /10 B-6850), EX-(OE-IBB), EX-(NKI), (GEF) LSD. 12C, 138Y.

3 A320-214 (CFM56-5B4) (4743, B-8162; 4988, B-8186; 5191, B-8185), EX-(D-ABFU, D-ABFZ, & D-ABNA) 2015-07 & 2015-08. (GEF) LSD. 12C, 138Y.

1 A320-214 (CFM56-5B4) (5003, /12 OE-LEI), BF (NKI) 2012-02. 12 YR LSD. 12C, 138Y.

1 A320-214 (CFM56-5B4/P) (5252, /12 B-9985), EX-(BER) 2013-10. CHINA AIRCRAFT LEASING LSD. 12C, 138Y.

3 A320-214 (CFM56-5B4/P) (7111, /16 B-8606, 2016-08; 7211, /16 B-000Q, 2016-10; 7531, /17 B-8878, 2017-05).

1 A320-232 (5875, B-1826), EX-(B-OOOR) 2017-02.

2 +28 ORDERS (COMAC) (CCC) ARJ21-700 (CF34-10A) (B-3321, 2015-11; 105, 2016-10), 90Y; & 78 seats in 2 classes.

Management:
(definitions)

Click below for photos:
UEG-MGMNT

ZHUANG HAOGANG, CHAIRMAN CHENGDU AIRLINES (UEG) & GENERAL COUNSEL OF (COMAC) (CCC).

LUO YU, DEPUTY GENERAL MANAGER.

WENBIN WANG, CHIEF EXECUTIVE OFFICER (CEO).

 
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