SHANGHAI: China Eastern Airlines is moving to upgrade its presence in Beijing into a branch in an effort to expand its shares in the capital's fast growing air passenger market.

China Eastern has filed an application to the General Administration of Civil Aviation of China (CAAC) and has preliminary approval from the authority's North China arm, according to a statement on the administration's website.

Airline spokesman Li Jiang told China Daily the company would not make any comments before the final approval is granted, which could be as early as next week.

Earlier, China Eastern President Li Fenghua told Shanghai's local media the move is to help the company integrate its resources and improve services in Beijing.

Based in Shanghai, China Eastern has built a stronghold in Shanghai. Until recently, it had only been operating as an office in Beijing.

The office was upgraded into a base early this year, allowing the airline to operate more routes departing from the capital city. Now the airline is aiming for a bigger slice of the cake.

China Eastern currently has only 11 per cent of the capital's airline market, much less than its two major rivals Beijing-based Air China and Guangzhou-based China Southern.

Lu Shaojun, a senior official from China Eastern, told Shanghai Securities News that setting up a branch in Beijing will make it possible for the airline to base more planes in Beijing and enhance marketing and maintenance capacity.

According to an online statement, China Eastern will assign more B737 series planes and technicians to its Beijing branch.

China Eastern's step came after China Southern moved northward to expand its presence in Beijing.

Early in September 2004, China Southern began to penetrate the Beijing Capital International Airport by occupying its Terminal 1 and becoming the country's only airline to have a dedicated terminal.

In December last year, China Southern opened its Beijing branch.

Air China, the country's flagship carrier, has also quickened its step.

The company vowed to invest 2.27 billion yuan (US$291 million) by 2008 to build and expand its stronghold in Beijing.

The flurry of expansions is targeted at the highly lucrative potential the location presents in the next few years, said an analyst from Guosen Securities who declined to be named.

He said the 2008 Olympics would be an unprecedented opportunity for the airlines, as the market will experience explosive growth that year and in the following years.

According to the CAAC, the Beijing Capital International Airport transported 41 million passengers and 782,000 tons of cargo last year.

In the first nine months of this year, passengers carried reached 36.16 million at the airport, up 19.9 per cent year-on-year. Cargo transported registered 696,000 tons, up 22.3 per cent year-on-year.

Experts predict that in 2008, monthly transported passengers will reach 5.56 million and the airport will transport 60 million passengers a year by 2015.