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Sichuan Airlines invests in Northeast Airlines

Updated: 2010-06-17

Sichuan Airlines' investment of 400 million yuan ($59 million) in the struggling Northeast Airlines was approved by the Sichuan Provincial State Assets Management Committee on Wednesday.

It marked the takeover by Sichuan Airlines of Northeast Airlines, the first airline based in Northeast China.

The 400 million yuan investment accounts for 97 percent of equity interest in the troubled airline, with the remaining 3 percent held by the Shenyang branch of Zhongrui Investment Ltd, its former owner.

After the takeover, the registered capital of Northeast Airlines registers at 460 million yuan ($68 million).

Set up on Nov 8, 2007, Northeast Airlines went downhill shortly after that. As one of its stockholders, Sichuan had greatly supported three of its passenger airliners, as well as the company's introduction of talent and foreign airliners.

Sichuan Airlines is planning to restructure Northeast Airlines and establish New Hebei Airlines, together with its partner, the State-owned Jizhong Energy Group in Hebei province.

A cooperative agreement between the two was signed on March 18.

New Hebei Airlines will be formally established on June 29, using the logo of a capitalized J resembling a soaring eagle.

According to Sichuan Airlines, the letter J is the abbreviation for Ji, the alternative name of Hebei province, and the eagle represents the soaring ambition of the new airline.

Sichuan Airlines would expand its airliners to Guangxi Zhuang autonomous region and Liaoning province after the launch of the new airline, said its chairman, Lan Xinguo.

 
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