Shanghai-based China Eastern Airlines on Sunday established a southern branch in Guangzhou, capital of South China's Guangdong Province, a move to further tap the region's market in the world's second-largest aviation industry.

All three State-owned airlines, which used to compete within their bases, are now competing in three hub cities: Beijing, Shanghai and Guangzhou.

Earlier, Air China, based in Beijing, marched into South China's market with the help of Shenzhen Airlines. China Eastern and Guangzhou-based China Southern Airlines both set up branches in Beijing, and Air China and China Southern both have branches in Shanghai.

Insiders said the moves by the three giants to tap into other carriers' territories showed that they are becoming market-oriented instead of administration-oriented. Earlier, the former head of the Civil Aviation Administration of China expressed the hope that the three airlines could build their own hubs within their respective territories.

However, how to win more flight slots in first-tier cities is a challenge ahead of the carriers.

China Southern said in June that the operation of its Airbus A380 jumbo yielded profit in 2015 after years of losses. The most suitable flights for the jumbo are long-haul routes such as those starting from Beijing, but the carrier has found it is hard to win flight slots in Beijing.

China Southern enjoys a dominant market share in Guangdong, followed by China Eastern with a share of 11 percent, the 21st Century Business Herald reported on Sunday.

China Eastern now serves six cities in Guangdong Province with 120 flights daily, and it also flies to three cities overseas. Its Guangdong branch hopes to put nearly 60 airplanes into service in total by 2020, and it plans to open continental flights from Guangzhou to Australia and North America.