(Yicai Global) June 21 -- Ruili Airlines' biggest shareholder Guopeng, a state-owned investment firm based in the Chinese city of Wuxi, has nearly doubled its stake in the carrier to 48 percent.

Guopeng acquired a 22.2 percent stake in Ruili Airlines for CNY805 million (USD111.9 million) after 28 rounds of bidding on the judicial auction platform of internet giant Alibaba Group Holding, which ended yesterday. It secured the equity from the carrier's founder Dong Lecheng for 35 percent more than the starting price.

Because of huge debt and operating difficulties during the Covid-19 pandemic, Dong and his Yunnan Jingcheng Group transferred Ruili Airlines' controlling interest to Wuxi Communications Industry Group, which owns Guopeng, in 2021. 

Following the auction, Dong no longer has a stake in Ruili Airlines, while Yunnan Jingcheng's remains less than 10 percent. Wuxi Communications owned 19 percent of the carrier, besides Guopeng's 48 percent, while Guolian Trust, another state-owned firm in Wuxi, owns the rest.

Established in 2013, Ruili Airlines' main base is Kunming Changshui International Airport in Yunnan province. In 2021, the firm changed its name to Sunan Ruili Airlines from Ruili Airlines after Wuxi Communications' takeover, launching a dual base system in Kunming and Wuxi.

Ruili Airlines operates 23 aircraft and is valued at CNY3.8 billion (USD528.2 million) based on the price achieved at auction.

China's civil aviation industry lost more than CNY300 billion (USD41.7 billion) over the past three years, industry sources told Yicai Global. Domestic flights have steadily recovered after the government eased Covid-19 restrictions, but more than 10 local airlines remain in difficulties, they added.

Editors: Dou Shicong, Martin Kadiev