Spring Airlines (9C, Shanghai Hongqiao) has become the latest privately-owned Chinese carrier to gain an equity stake in majority state-owned airline following its acquisition of a 1.63% stake in China Southern Airlines (CZ, Guangzhou).

According to a Shanghai stock exchange announcement, Spring Airlines subscribed to 140,531,561 A Shares in China Southern for CNY846 million yuan (USD123 million) during a recent A share issuance drive. Overall, the sale saw a total of 1,578,073,089 ordinary shares being sold for around CNY9.5 billion (USD1.38 billion).

Other subscribers included China Southern Air Holding, China National Aviation Fuel Group Corporation, Guangzhou Investment Fund (LLP), the China Structural Reform Fund Co., the Hotland Innovation Asset Management Co., and the China Life Asset Management Co.

As it stands, Spring Airlines is now China Southern's fifth-largest shareholder behind China Southern Air Holding (which, despite the share capital increase, remains the airline's controlling shareholder with a total of 50.54% stake), China National Aviation Fuel Group Corp., China Securities Finance Corp., and China Structural Reform Fund Co.

The Chinese Government is using mixed-ownership reform as a means of improving the operational performance and profitability of many of its state-owned enterprises. Earlier this year, Juneyao Airlines (HO, Shanghai Hongqiao) and its parent firm, Juneyao Group, announced they would pursue a stake of no more than 10% in China Eastern Airlines (MU, Shanghai Hongqiao) valued at around CNY11.8 billion (USD1.78 billion).