CHINA Eastern Airlines plans to invest 2.38 billion yuan (US$351 million) to set up an airline venture with the Yunnan provincial government to enhance its presence in the province.

The carrier will hold a 65 percent stake in the 3.66 billion yuan venture and the Yunnan government the remainder, it said in a statement to the Shanghai Stock Exchange yesterday.

The Shanghai-based carrier will fund the venture with 700 million yuan in cash and 1.68 billion yuan worth of aviation-related assets, while the Yunnan government will invest 254 million yuan in cash and 1.03 billion yuan in land, the statement said.

The carrier said the venture would boost the aviation industry in Yunnan, a popular tourist destination, and strengthen China Eastern's competitiveness and market share.

China Eastern will provide 700 million yuan in the first phase and the rest within three months upon the establishment of the venture. The Yunnan government will offer 100 million yuan in the first phase and the rest within two years.

Last year, the Yunnan government invested 290 million yuan in a 32 percent stake in Lucky Air, a subsidiary under HNA Group.