Air China strengthens foothold on Shenzhen Air
China - Air China is set to invest 682.1 million yuan (US$99.9 million) in Shenzhen Airlines, further increasing its stake in the privately-run airline to 51%.
Air China already owns a 25% stake in Shenzhen Air, and this latest investment is expected to better position the flag carrier to compete with rival China Southern Air.
The investment has already been approved by the country's aviation regulator, and is expected to improve the financial situation of Shenzhen Air. According to a statement, Shenzhen Air booked a 864 million yuan (US$126 million) net loss in 2009, reports Reuters.
Expecting earnings to improve this year, Air China is keen on mergers and acquisitions at home and overseas. It has also recently launched a cargo venture with Cathay Pacific Airways Ltd, securing its position in east China where rival China Eastern Airlines dominates.
China Total Logistics, a subsidiary of Shenzhen International Holdings Ltd, also plans to get a bite of the pie by investing 348 million yuan (US$51 million) in Shenzhen Air, increasing its stake to 25% from 10%.
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