Mesa to fly in China

A partnership to offer air service among 11 cities is a coup for the owner of go!

Mesa Air Group Inc. -- parent of interisland carrier go! -- will become the first U.S. passenger airline to operate a joint venture to fly in mainland China.

The Phoenix-based carrier will hold a signing ceremony in Beijing today (tomorrow in China) announcing it has signed a joint venture agreement with Shenzhen Airlines to create a Chinese regional airline, the Star-Bulletin has learned.

NEW HORIZONS Mesa Air Group Inc. and Shenzhen Airlines are teaming up on a joint venture to fly within mainland China. Partnership: Shenzhen, 51 percent, $32.6 million; Mesa, 49 percent, $31.3 million Cities served: Shenzhen, Beijing, Chongqing, Xiamen, Nanjing, Kunming, Dalian, Shenyang, Xian, Zhengzhou and Nanning Start date: Within a year Aircraft: Twenty 50-seat regional jets prior to the 2008 Beijing Olympic Games. The fleet is expected to grow to more than 100 planes within five years and comprise a mix of 50-, 70- and 90-seat aircraft. Founded: Mesa, 1982; Shenzhen, 1992 Employees: Mesa, 5,000; Shenzhen, 6,300 Headquarters: Mesa, Phoenix; Shenzhen, Shenzhen, in southern China's Guangdong province

The new airline, whose name is still being finalized, will operate 50-seat regional jets within mainland China to Shenzhen, Beijing, Chongqing, Xiamen, Nanjing, Kunming, Dalian, Shenyang, Xian, Zhengzhou and Nanning.

Service is expected to begin within 12 months, with 20 jets to be in operation before the 2008 Beijing Olympic Games.

The fleet is expected to grow to more than 100 planes within five years and be comprised of 50-, 70- and 90-seat aircraft. The type of aircraft that will be used is still being determined.

The historic deal represents a big coup for Mesa, which, like other U.S. carriers, has been seeking to gain a foothold in a Chinese market that has a population of 1.2 billion. China also has relatively few regional carriers, with only about 70 planes in service.

Mesa previously had said it was seeking to operate a regional airline in China, and reported last month on a conference call that it was closing in on a deal. Jonathan Ornstein, chairman and chief executive of Mesa, was traveling in China yesterday and could not be reached for comment.

Shenzhen will invest $32.6 million for 51 percent of the venture while Mesa will invest $31.3 million for a 49 percent stake, Bloomberg News reported today, citing the 21st Century Business Herald, a Chinese-language publication.

While Mesa will be the first U.S. airline to jointly conduct passenger service within China, it will not be the first American-based carrier to operate there. United Parcel Service and FedEx both fly commercial operations within the country.

Mesa, which began service in Hawaii in June, operates four 50-seat Bombardier CRJ-200s between the islands.

Overall, Mesa operates 199 aircraft with more than 1,300 daily flights to 173 cities, 43 states, Canada, Mexico and the Bahamas. It has contractual agreements to operate as America West Express, Delta Connection, US Airways Express and United Express.

Mesa will end 2006 with more than $1.3 billion in revenue. It carried more than 14 million passengers through the first 11 months of this year.

Shenzhen operates 45 A320 and B737 aircraft on 100 routes within mainland China and Southeast Asia. The carrier has flown 5.3 million passengers this year.