Comac-Operating China Eastern Subsidiary To Keep Bizjets

ARJ21
An ARJ21 in OTT Airlines livery.
Credit: China Eastern

SYDNEY—A China Eastern subsidiary set up to fly Comac aircraft will serve coastal districts from the Yangzi River Delta and retain the business aviation operation on which it has been based, the parent company said.

In English the new airline is called One Two Three Airlines, a direct translation of its Chinese name, but it will be marketed as OTT Airlines. 

State-owned China Eastern announced its establishment on Feb. 26, though the business is actually a reorganization of China Eastern Business Jet Co. Ltd. Plans for the conversion of the business aviation company to a domestic-airliner operator were mentioned last year. 

The date for commencement of operations has still not been stated. The first type in service will be the Comac ARJ21 and the second the C919.

China Eastern Business Jet Co. Ltd. has been a fully owned subsidiary of the group.

OTT Airlines will unite the business and commercial aviation activities, China Eastern said. This must mean operational unity, not product integration, since China Eastern has said OTT Airlines will be a low-cost carrier. 

The new airline “will be based in the Yangzi River Delta, serve the coast and reach nearby developed destinations,” the parent said. The delta is centered on Shanghai, which is China Eastern’s home, and also includes such large cities as Nanjing and Hangzhou.

China Eastern has previously said the creation of an exclusive operator for Comac products would express confidence in Chinese aircraft. But an obvious consequence of putting the group’s ARJ21s and C919s in a subsidiary will be that any shortcomings in running costs and reliability of the aircraft will be isolated from the mainline operation.

In case of difficulties, the “China Eastern” brand would not be damaged and the group would have a clear set of accounts as a basis for any request for government compensation for performing national service in supporting Comac, itself a state company.

China Eastern has been slated as the first operator of the C919, but OTT will presumably now take on the role—with considerable technical assistance from the parent. The ARJ21 entered service in 2016 with Comac subsidiary Chengdu Airlines and is also in service with Xiamen Airlines subsidiary Jiangxi Air and private carrier Genghis Khan Airlines. 

Each of China’s three big state carriers—China Eastern, China Southern Airlines and Air China—ordered 35 ARJ21s in August 2019. Each has been expecting its first delivery in March and its third by the end of 2020. But the Wuhan virus epidemic that became a national emergency late last month is likely to have affected Comac’s production timing.

C919 certification is due in 2021.

As to the new airline’s name, China Eastern adds that OTT can also be understood as “on time travel” and “over top travel,” the latter apparently meaning it will be very good, not excessive in some way.
 

Bradley Perrett

Bradley Perrett covers China, Japan, South Korea and Australia. He is a Mandarin-speaking Australian.