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Sichuan Airlines injects 200m yuan in United Eagle

By Lu Haoting (chinadaily.com.cn)
Updated: 2009-03-18 11:12

United Eagle Airlines, a private carrier based in Sichuan province, received a 200 million yuan capital injection on Tuesday from Sichuan Airlines.

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State-owned Sichuan Airlines will now become United Eagle's largest shareholder by controlling 76 percent of its stakes, China Business News reported on Wednesday.

United Eagle's board chairman and general manager will be named by Sichuan Airlines.

United Eagle's debt-to-asset ratio has reached over 90 percent as the aviation market deteriorates due to the economic slowdown, said Sun Zhijun, the airline's finance director.

The capital injection will help the airline lower its debt-to-asset ratio to less than 80 percent, Sun was quoted as saying by the Shanghai-based newspaper.

United Eagle, with a fleet of only five aircraft, grounded two jets at the end of November due to mounting losses. The Sichuan Airport Group said in December that it had stopped providing VIP lounge and boarding bridge services to the airline, as it owed airport fees of over 30 million yuan.

Sichuan Airlines said United Eagle will mainly focus on its feeder line service in the future.