China Eastern Airlines will invest 50 million yuan (US$7.3 million) to set up a business jet unit and cash in on the growing demand for corporate air services.

The wholly owned unit will offer services for business aircraft, including operation and management, leasing, ground handling and maintenance, the carrier said in a statement yesterday.

The service will be targeted toward high-end clients such as multinational companies and celebrities, according to the statement.

"With the approach of the Olympic Games and the Shanghai World Expo, there is great potential in the domestic business aviation market," the carrier said. "So it's time for China Eastern to diversify and add professional services for high-end clients."

China Eastern, the country's third-largest carrier, said it does plan to purchase business jets but may renovate existing planes.

More than 400 of the world's top 500 companies are doing business in China, and about 80 percent of them own business jets, China Eastern said.

The Shanghai-based carrier currently offers ground-handling services for charter flights and business jets in more than 40 airports across China.

Competitor Air China has run a business jet unit since 2003, which deals in charter service, sales consulting, aircraft operation management, maintenance and piloting.

The company has two aircraft devoted to charter flights; one that can carry up to 10 passengers and the other seating up to seven passengers.

Boeing Co said China's business aviation market promises great potential. The company sold 20 large private business jets in the Asia-Pacific region in the past seven years, 15 of which went to the China market.

(Shanghai Daily August 7, 2008)