(Yicai Global) Jan. 6 -- Yibin Wuliangye Group, a Chinese maker of alcoholic drinks, has invested CNY5 billion (USD729.7 million) in Sichuan Airlines Group to help it recover from losses in recent years as a result of the pandemic.

The two state-owned firms, both based in China’s southwestern Sichuan province, reached an agreement on the investment last month, a person familiar with the matter told Yicai Global.

The new funds will be used to boost the airline operator’s capital, the person said, adding that other shareholders will also invest more to increase its capital.

Sichuan Airlines Group is the top shareholder in Sichuan Airlines with a 40 percent stake, followed by China Southern Airlines with 39 percent, and China Eastern Airlines and Shandong Airlines with 10 percent each.

Sichuan Airlines lost CNY2.5 billion in 2020 and CNY1.8 billion in 2021, according to its financial results.

China’s civil aviation industry has run up a combined loss of more than CNY300 billion (USD43.8 billion) since the start of the pandemic, according to data the Civil Aviation Administration of China released in July 2022. The CAAC also said at the time that it had handed a CNY3 billion bailout to each of Air China, China Eastern, and China Southern, the country’s largest carriers.

Wuliangye and Sichuan Airlines Group joined hands for the first time in 2018 when they set up Sichuan General Aviation Investment Management. The liquor maker has a 35 percent stake in the joint venture. Wuliangye also became the title sponsor of the new airport in Yibin, Sichuan in 2019.

Editor: Futura Costaglione