China's first semi-private airline to take off
( 2002-08-19 11:08) (1)
China begins to experiment with its nationwide civil aviation reform by announcing that its first airline company partly funded with private investment was set up.
The newly-founded company called China Eastern Airlines Wuhan Co Ltd (CEAW) has a registered capital of 600 million yuan (72.6 million US dollars), 18 percent of which comes from the Shanghai Junyao Group Company, a private firm with assets of more than one billion yuan (120 million US dollars), according to Monday's China Daily.
CEAW has been re-organized from its predecessor Wuhan Airlines with 40 percent of its shares going to China Eastern Airlines. Wuhan Airlines also occupies 40 percent and the remaining 20 percent goes to the Wuhan High-tech Shareholding Group Company Ltd.
Wuhan Airlines used its net assets as capital for the shareholding company and the other three have brought in their own investments in cash. CEAW will use China Eastern's logo, code and service system.
Yang Yuanyuan, director of the General Administration of Civil Aviation of China, acknowledged that the new company is "a new good model" for civil aviation reform, which shows that a multiple- funded shareholding airline can be organized by relying on a flagship airline and adopting private funds.
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