Once financially troubled, privately-owned United Eagle Airlines has been reborn, and will soon take off for an exciting new journey bearing "Chengdu Airlines" livery. Leading Chengdu-based law firm Tahota and Jun He have played lead roles advising on the transformation.
An agreement was reached between Commercial Aircraft Corporation of China (COMAC), the Chengdu government, Sichuan Airlines Group, and United Eagle yesterday. Under the agreement, COMAC will invest RMB7bn (US$1bn) in total into United Eagle as an important part of the plan to restructure United Eagle. State-run Sichuan Airlines, the major shareholder of United Eagle, sought out its long-standing external legal advisor Tahota, while Jun He represented COMAC.
Also under the agreement, United Eagle has agreed to purchase 30 ARJ-21 aircrafts, the country's first homemade regional jets manufactured by COMAC.
"It's a landmark deal for Western China's aviation industry. COMAC's investment shows the increasing importance of the Western market, and the newly strengthened airline will better service the region's accelerating economic growth," said Tahota's founding and managing partner Cheng Shoutai, who led the Tahota team.
As Sichuan Airlines' long-standing external legal advisor, Tahota was also involved in Sichuan Airline's acquisition of 56% additional shares in United Eagle in March 2009 and the leasing of the first Tianjin assembled Airbus A320 from Dragon Aviation Leasing.
Cheng also noted that COMAC's investment and the new Chengdu Airlines will drive Chengdu's plan to expand the Chengdu Shuangliu International Airport to become China's fourth largest air hub by 2015, after Beijing, Shanghai and Guangzhou. According to the plan, the airport will be able to handle 40 million passengers and one million tons of cargo by 2015. It will also increase the number of routes in operation to 20.
For an in-depth insight into aviation law, see p38 of ALB China Issue6.10.
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