China Eastern establishes Yunnan subsidiary

China Eastern Airlines launched a Yunnan subsidiary this week based on a framework agreement the Shanghai-based carrier signed with the Yunnan local government in May 2009. In a statement released via the Shanghai Stock Exchange, CEA said its initial investment will be CNY2.38 billion ($35 million) to hold a 65% stake in the new entity. The Yunnan local government holds the remaining 35% (ATW Daily News, June 2, 2009). The deal still needs approval from CEA’s minority stakeholders. CEA Board Secretary Luo Zhuping said it will be able to expand its market share in Yunnan(it now has about a 50% share) by launching the subsidiary.