BIZCHINA / Overseas Investment
Mesa Air, Shenzhen Airline to form JV
(Xinhua)
Updated: 2006-12-22 15:11
Shenzhen Airlines and United States regional carrier Mesa Air Group Inc
will sign an agreement in Beijing today to form China's first
Sino-foreign regional airline, the Shenzhen-based carrier said yesterday.
China's biggest private airlines will invest 255 million yuan (US$32.6
million) to hold 51 percent of the Beijing-based new carrier, which has a
registered capital base of 500 million yuan.
Mesa Air Group and Wilmington Trust Corp will pay the US dollars
equivalent to 245 million yuan to take the rest of the stake, the airline
said through its public relations agency.
The new venture will begin operation at the end of next year with 20
airplanes which are mostly 50- to 90-seaters.
It will add 20 more regional aircraft annually to have a maximum of 160
to 200 aircraft, the airlines said yesterday.
China's fast expanding air traveling demand has attracted carriers to tap
the growing demand from small- and medium-sized cities.
Soros stake
Hainan Airlines, China's fourth biggest carrier in which financial tycoon
George Soros has a stake, announced last week it had applied for a
license for its subsidiary Grand Xinhua Express Airlines, a regional
passenger and cargo carrier.
Grand Xinhua, which is based in China's northern city of Tianjin, is 81
percent owned by HNA Group, Hainan's parent, and 19 percent owned by
Hainan.
It will lease five Don328s from Hainan when it starts flying early next
year.
Hainan Airlines now has 29 regional aircraft, accounting for 42 percent
of the nation's total.
HNA Group plans to invest 10 billion yuan in the coming three to five
years to build its regional hub in Tianjin with 50 to 100 regional jets.
Hainan has ordered 100 regional aircraft from Brazil's Empresa Brasileira
de Aeronautica SA for US$2.7 billion, including 50 50-seat ERJ145s and 50
106-seat Embraer 190s.
Meanwhile, Tianjian-based Okay Airways, China's first private carrier,
signed a deal for 30 Xinzhou-60 jets earlier this year to develop its
regional routes.
China Eastern Airlines Group said it also planned to build regional
networks with Hubei Province's Wuhan as its hub.
(For more biz stories, please visit Industry Updates)
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