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China Eastern buys 8% of Juneyao Airlines for US$455 million
November 16th 2018
The relationship between Shanghai stalwarts China Eastern Airlines and Juneyao Airlines just got a lot more intimate. Read More » After Juneyao Group took an approximately 8% shareholding in state-controlled China Eastern for US$1.9 billion in July, China Eastern this week followed suit and acquired approximately 8.5% of Juneyao Airlines for US$455 million.
Juneyao said the proceeds from the equity sale to China Eastern would be used to pay for three additional B787-9 Dreamliners, a spare GEnx engine and to repay loans.
Juneyao, a private carrier, took delivery of the first of ten on-order B787s in October. The airline is flying its first Dreamliner twice daily on its Shanghai Hongqiao-Shenzhen trunk route. Before it commences flights to Helsinki next year, the B787s will be rostered on “regional routes, such as Singapore and Japan, in early 2019,” the carrier has told Orient Aviation.
Juneyao will receive three B787s in 2018 and two in 2019, which will increase its international capacity by 9.2% and 4.4%, respectively. The remaining five airplanes will follow in 2020 and 2021. Juneyao has a regional fleet of 41 A320s and 27 A321s. The airline is led by its chairman, Wang Junjin.
The China Eastern-Juneyao Airlines equity swap will allow the two Shanghai-based carriers to further tighten their grip in the Yangtze River Delta where combined they already have a market share exceeding 50%.
In September, another Shanghai-based carrier, LCC Spring Airlines, paid US$122 million for a 1.63% shareholding in state-controlled China Southern Airlines, headquartered in Guangzhou.
