Boeing 787 Delivery Delay Hits Hainan Airlines

January 23, 2013

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Hainan Airlines, China's fourth-largest carrier, said Boeing's failure to deliver its 787 Dreamliner aircraft had forced the airline to delay some new routes, including between Beijing and New York.

"Frankly, it's a little disappointing the aircraft has been delayed so many times," Chen Feng, chairman of HNA Group, the airline's parent company, said on Wednesday. "We still think it's a good aircraft, but this has had some effect on our planning."

Hainan Airline has 10 Boeing 787-8s on order. Each aircraft has a list price of USD$206.8 million, according to Boeing's website.

The US Federal Aviation Administration grounded the 787 temporarily after a second incident involving a lithium ion battery caused an emergency landing.

Under Chen, Hainan Airlines has expanded rapidly and added brands such as Hong Kong Airlines to its portfolio. It also bought 48 percent of niche French carrier Aigle Azur in October.

In an interview at the World Economic Forum in Davos, Chen said Hainan Airlines was looking to join an airline alliance, but was unable to join one as all three major groupings - Star, oneworld and Skyteam - already have a Chinese partner.

Air China is a member of Star Alliance, while China Eastern and China Southern are both members of Skyteam. Cathay Pacific, Hong Kong's dominant carrier, is a oneworld member.

"We'll continue looking for an opportunity to work with airlines either bilaterally or through an alliance, but there are issues," Chen said.

(Reuters)