DALLAS – Beijing-based Air China (CA) has become the majority shareholder of Shandong Aviation Group (SAG), which operates the Chinese domestic carrier Shandong Airlines (SC)
The Chinese flag carrier signed an agreement with Shansteel Financial Holdings and Qingdao Qifa to purchase their shareholdings of 1.4% and 0.9% in SAG on December 30, 2022.
The move will see CA’s stake in SAG increase from the current 49.4% to 66%, as well as controlling 23% of SC. The other shareholders in the airline are SAG, which owns 42%, and the remaining 35% of shares are publicly traded.
The deal, valued at around CNY32.9m (US$4.8m), will see a capital injection of CNY10bn (US$1.4bn) to SC made by CA, Shandong Finance and the construction company Shandong Hi-Speed. This, it is said, will be used to expand SC’s operations.
Shandong Airlines, founded in 1994, will now become an Air China subsidiary. With its extensive domestic presence and fleet of Boeing 737-700s and -800s, the takeover will allow CA to “enhance its overall profitability by further strengthening market layout and deepening its cooperation with Shandong Aviation.”
Featured Image: The acquisition will allow Air China to expand its domestic operation. Photo: Alberto Cucini/Airways.