China's JoyAir, Okay Airways outline merger plans

JoyAir (JR, Xi'an Xianyang) will acquire a majority 48% stake in its proposed new joint-venture with Okay Airways (BK, Tianjin) following the signing of a Memorandum of Understanding (MOU) about the merger of their regional operations in August this year. Sources who spoke to China's CARNOC news site on condition of anonymity said Okay Airways would hold a 46% stake in the company, with the remaining 6% to be held by management.

Last month, China Eastern Airlines (MU, Shanghai Hongqiao) announced plans to dispose of its remaining 5% stake in JoyAir citing a lack of compatibility between the two airlines.

The new Tianjin-based carrier will be built around JoyAir with the MA-60 (of which the two airlines operate a combined fleet of over twenty with additional order incoming).

The merger is expected to breath new life into both airlines which have struggled to attain profitability since launching in the last decade.

JoyAir currently operates a fleet of eight MA-60s on flights throughout China while Okay Airways operates one B737-300(F), fourteen B737-800s, three B737-900(ER)s, and thirteen MA-60s on flights throughout China as well as to South Korea and Thailand.