Sichuan Airlines-United Eagle merger: COMAC becomes largest shareholder
Commercial Aircraft Corporation of China (COMAC), Sichuan Airlines Group and Chengdu Communications Investment Group signed an official cooperation agreement on 15-Oct-2009 on the shareholder restructuring of United Eagle Airlines Co, which will be renamed Chengdu Airlines Co (People's Daily Online/CAAC, 19-Oct-2009). The three parties will more than double the carrier’s equity capital from CNY300 million (USD44 million) to CNY680 million (USD100 million). COMAC will hold a 47.96% stake, while Sichuan Airlines and Chengdu Communications Investment Group will hold 40.97% and 11.07% shares, respectively.
The first step following the restructuring will be the integration of United Eagle and Sichuan Airlines, establishing Chengdu Airport as its hub of operation, with a mid-term aim to make the combined carriers a market leader in the Southwest region. In the long-term, the carriers will operate a combined fleet consisting of ARJ21 and C919 aircraft, operating domestically initially, and then internationally to South Asia and Southeast Asia. COMAC also signed an agreement to supply 30 ARJ21-700 aircraft to the carrier from 2010. The airline, which is expected to have eight aircraft by the end of 2009, plans to expand its network to expand its network to surrounding provinces with the new aircraft, with new services to Yunnan, Guizhou, Hunan, Shaanxi and Gansu.