China Eastern to purchase 8% stake in Juneyao Airlines for USD 460 mln
Nov 14, 2018 (China Knowledge) - State-owned China Eastern Airlines will be purchasing an 8% stake in Juneyao Airlines for USD 460 million. Juneyao is one of the country's largest private carriers. China Eastern will be purchasing 169 million non-public offered shares through its Eastern Airlines Industry Investment unit.
China Eastern Airlines and Shanghai Airlines make up 40% of the market share in Shanghai. Juneyao comes in at third place with an 8% market share. The cooperation of the two airlines will allow them to take better control of the city’s air travel market.
The two companies’ tickets are already available on each other's websites and there is still room for further cooperation between both parties at the higher management levels. This move will allow the two airlines to better take on rivals China Southern Airlines and Spring Airlines.
Juneyao will use the funds received from China Eastern to purchase three Boeing 787 Dreamliners, one Genx-1B74/75 spare engine and to pay off some of its outstanding loans.
With this offering, the two companies now hold equities in each other after a deal in July saw Juneyao take a 5% stake in China Eastern for USD 450 million.
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