(Yicai Global) April 27 -- Chinese low-cost carrier Spring Airlines has confirmed a media report that Japan Airlines is preparing to increase its stake in Spring Airlines Japan, online news outlet The Paper reported today.

JAL's capital increase in Spring Airlines Japan is evidence that the travel industry between China, Japan, South Korea and Southeast Asia is gradually returning to normal, the report said, citing the Chinese carrier. Spring Airlines welcomes this move, it added.

Yesterday, the Nikkei reported that the Tokyo-based airline plans to invest billions of yen, equivalent to tens of millions of US dollars, to acquire a majority stake in Spring Airlines Japan by the end of June. At present, Shanghai-based Spring Airlines is the biggest shareholder with a 33 percent stake.

Spring Airlines Japan, which operates out of Tokyo’s Narita International Airport, operates three domestic routes in Japan and six international routes between Japan and China. JAL currently only has a small stake in it.

Last April, Spring Airlines was forced to inject CNY750 million (USD115.7 million) into the Japan unit to help keep it afloat during the Covid-19 pandemic when air travel ground to a halt. This brought Spring Airlines’ capital contribution to 57 percent from the original 30 percent. As Japanese law stipulates that foreign investors cannot hold more than one third of voting rights, the Chinese carrier kept its voting rights at 29 percent but increased its holding of non-voting preferred shares.

This year there is reason to be optimistic, Spring Airlines said. The Regional Comprehensive Economic Partnership, the world’s largest free trade deal signed in November last year between countries in the Asia-Pacific region, and the roll-out of Covid-19 vaccines across the globe should boost international travel, it added.

Editor: Kim Taylor