China's Xiamen Airlines has been forced to take over Fuzhou airport, which is sinking under debts of three billion yuan (about HK$2.81 billion).
The airport's only salvation was possible direct flights between the mainland and Taiwan, an official newspaper said.
Xiamen Airlines would take over Fuzhou's Changle airport and 1.6 billion yuan of its debt next month under a complex deal involving a 400 million yuan injection of fresh capital into a new firm, the mainland's Business Post newspaper reported.
Xiamen Airlines will hold 25 per cent of the company, with the Fuzhou government and other firms taking 40 per cent and 35 per cent stakes.
The deal was finalised at a meeting of the East China division of the Civil Aviation Administration of China (CAAC) in Shanghai on February 12.
Officials of Xiamen Airlines and Changle airport declined to comment.
The sale follows a change in CAAC's policy that regarded airports as strategic assets that had to be held by the state.