BEIJING – China’s state-owned airlines are to be opened to private investments starting from Friday, after a new regulation by the Ministry of Transport came into effect, allowing more than 50 percent private investment in major carriers.
The new rule allows more than 50 percent of the equity of Air China, China Eastern and China Southern, the three biggest airlines in the country, to be sold to private investors as long as the state remains the biggest shareholder.
Private companies can own up to 5 percent shares of Chinese public sector airlines, including the big three and smaller carriers operating in the country, according to the ministry, which said the reform was aimed at easing restrictions in the industry.
The measures are in line with the government’s desire to expand the reform of state-owned enterprises and develop a mixed ownership model, the ministry said in a statement.
The number of airports where private investment is allowed – until now limited to provincial capitals and nine other important cities – has also been increased to include all international and regional airports, which form part of the government’s development plan.
The ministry said that state-owned and private firms can invest individually or jointly in the civil aviation industry, but stressed the need to meet the regulations.
In this regard, the new rule includes punishments for non-fulfillment of measures and makes it more costly for companies to act against the law.