China Eastern, AVIC I approved for new airline carrier
China Eastern Airlines and China Aviation Industry Corp I (AVIC I) have received approval to establish a new regional airline carrier, the China Business News reported. Happiness Airlines will be established in Xi’an, the capital of western China’s Shaanxi province, in the first half of this year with US$139.62 million (RMB1 billion) in registered capital. AVIC I – China’s largest state-owned aircraft maker – will hold a 60% stake in the new carrier and China Eastern will hold the remainder. China Eastern is reported to have exchanged fixed assets for its stake. The approval of the new carrier comes despite the General Administration of Civil Aviation suspending the processing of new applications to form carriers from the middle of last year. The suspension was slated to last until 2010, though it did indicate it could make exemptions for regional carriers in priority areas of China. Seperately, Singapore Airlines said it had no plan to put in a new bid for a 24% stake in China Eastern, China’s third largest carrier. A US$918 million offer was rejected in January by minority shareholders after Air China – the largest minority shareholder – called for the bid to be rejected on grounds it undervalued its worth.