China Eastern Airlines and several partners plan to launch a new airline in Hainan, as they eye growing air traffic to China’s southernmost island province amid Beijing’s plan to turn it into a free trade hub.
China Eastern will own a majority 51 per cent share in the new carrier, which has been given the preliminary name of Sanya International Airlines. One of China Eastern’s major shareholders, Juneyao Airlines, will have a 15 per cent stake, while 14 per cent of the new company will be held by a Shanghai unit of Nasdaq-listed Trip.com, China’s largest online travel agency.
Two other state-owned entities, Sanya Development Holdings and Hainan Communications Investment Holdings, will each own 10 per cent of the new joint venture, according to an announcement on the Hong Kong Stock Exchange on Sunday.
China Eastern, which lost 3.93 million yuan in the first quarter because of the coronavirus, said the new joint venture will have registered capital of 3 billion yuan (US$420 million) to 6 billion yuan.
The shareholders will pay in cash and other assets, which could include aircrafts. The framework agreement is still pending regulators’ approval, and the green light from the boards of each investor.
The project to make Hainan, which covers an area 30 bigger than Hong Kong, into a regional trade, shopping and shipping centre has been “planned, arranged and promoted by General Secretary Xi Jinping personally”, according to an earlier government statement.
The island province of 9.5 million people will also enjoy freedoms in terms of trade, investment, capital flows and the movement of people and data by 2035, as it moves toward becoming a hub of “strong international influence” by the middle of the century.
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