Henan infusion helps out airline

THE Henan provincial government has agreed to inject funds into Kunpeng Airlines - the latest tie-up between a local government and an airline.

The provincial government and Shenzhen Airlines, the parent of Kunpeng, have signed an agreement on the capital infusion whose amount has not been decided, an official of Shenzhen Airlines said yesterday.

Kunpeng was set up in 2007 with a registered capital of 500 million yuan (US$73.21 million) by Shenzhen Airlines, United States-based Mesa Air Group and a US trust company. Shenzhen Airlines holds 51 percent and Mesa 25 percent.

Kunpeng has been moved to Zhengzhou, capital of Henan, from Xi'an, capital of Shaanxi Province.

The global financial crisis has seen domestic carriers seeking financial support from provincial governments.

Hainan Airlines and its parent teamed up with the Tianjin government to form Tianjin Airlines while China Eastern Airlines and the Yunnan provincial government will set up a joint venture in Kunming, capital of the province.

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