Photo: Courtesy of China Eastern Airlines

China Eastern Air Holding Co said on Monday that it will receive a cash injection of 31 billion yuan ($4.6 billion) from four companies, as part of the equity diversification plan amid reforms of state-owned enterprises. 

China Life Investment, a subsidiary of the state-owned China Life Insurance, will inject 11 billion yuan, and Shanghai Jiushi Group, another state company will ante up  10 billion yuan, according to a news release sent to the Global Times on Monday. 

China Reform Holdings Corporation and China Tourism Group, will each contribute 5 billion yuan. 

After the capital injection, China Eastern Airlines will remain a central state-owned entity under the state asset regulator, and the controlling shareholder.

The move comes as the nation is encouraging state-owned enterprises to diversify ownership structures and as China's aviation industry is losing billions due to the coronavirus pandemic. 

The industry continues to suffer severe losses, losing 34.25 billion yuan in the second quarter, 3.85 billion yuan less than in the first quarter, the Civil Aviation Administration of China said.  The bleeding may have been stemmed somewhat in the final quarter considering the millions of passengers who packed planes during the recent National Day holidays. 

The move shows investors' confidence in the development of China's civil aviation and is a nod of approval for China Eastern Airlines development momentum in recent years. 

Li Yangmin, general manager of the China Eastern Airlines Group said the money will be mainly used on the Chinese Eastern Airlines and the logistics firm under the group, as well as the China United Airlines under the group.  

When asked if this is the best time to expand during the epidemic, Li said the downturn in the global aviation industry is the external impact caused by the pandemic, but domestic flights have returned to pre-virus levels, and the reform of equity diversification is an endogenous driving force for the industry.

The group also said the cash injection will help cut the asset-liability ratio of the group, as by the end of June this year, the asset-liability ratio of China Eastern Airlines was 78 percent, the highest among the three giants.