China Eastern to inject $165.8 million into Wuhan subsidiary
Published: April 10, 2012
China Eastern Airlines A330-300. By Rob Finlayson
China Eastern Airlines (MU) will inject CNY1.05 billion ($ 165.8 million) into its Wuhan subsidiary, China Eastern Wuhan Airlines Co., to enhance its position in central China. The Shanghai-based carrier said in a statement the Wuhan government will also invest CNY700 million. The two transactions will increase the Wuhan carrier’s registered capital to CNY1.75 billion from CNY600 million. MU remains the controlling stakeholder with 60% ownership, while the Wuhan local government holds 40%.
The company, formerly known as Wuhan Airlines, will add five aircraft with the investment, expanding its fleet to 50. It plans to transport 7 million passengers and 70,000 tonnes in cargo traffic by 2015.
Over the next five years, MU plans to add at least eight more international routes from Wuhan to Japan, Korea and other Southeast Asian countries. The carrier is scheduled to launch Wuhan-Singapore service April 19.
Last month, MU chairman Liu Shaoyong called on the Chinese government to make an $ 18 billion-$ 20 billion capital injection into China’s big three state-owned carriers to alleviate increasing financial pressures ( ATW Daily News, March 27 ).