Hainan Airlines reported that it plans to spend 1.08 billion yuan to acquire a 32.41 percent stake in Xinhua Airlines from Grand China Air, reports China Securities Journal, citing the company's announcement.

In addition, Chen Ming, the president of Hainan Airlines, will replace Wang Yingming as chairman of Hainan Airlines and Li Tie will be the president of Hainan Airlines.

Xinhua Airlines' registered capital was 2.258 billion yuan. Hainan Airlines and Grand China Air respectively held 67.59 percent and 32.41 percent stakes in Xinhua Airlines. Xinhua Airlines' net assets totaled 3.33 billion yuan, and its net profit was 139 million yuan as of March 31, 2011.

After the upcoming acquisition, Xinhua Airlines will become Hainan Airlines' wholly-owned subsidiary.