The Hong Kong Airport Authority and Hangzhou Xiaoshan International Airport in Zhejiang Province have formed a joint-venture company that will operate and manage the Mainland airport. The authority will invest $1.9 billion to hold a 35% stake in the airport.

Hangzhou Xiaoshan International Airport will be converted from a state-owned limited company to a limited liability joint venture company. The State-owned Assets Supervision & Administration Commission confirmed its net appraised assets - which it contributed to the new company - give Zhejiang parties a 65% equity stake.

Ready for take-off: (From left) Hangzhou Airport Chairman Chen Haimei and Airport Authority Chief Executive Officer Dr David Pang at the signing ceremony; AA Chairman Dr Victor Fung thanks all parties for their efforts in achieving the agreement; and Dr David Pang meets the media after the signing ceremony.

SASAC Chairman Chen Zhengxing noted the deal was "strategically significant in fully realising the economic potential and enhancing the competitiveness of state-owned enterprises of Zhejiang Province."

The two parties will jointly operate and manage Hangzhou Airport, aiming to enhance operation efficiency, service quality and management standards to bring it to world-class standards.

"This is a win-win agreement for both parties," Xiaoshan International Airport Chairman Chen Haimei said.

The authority's Chief Executive Officer Dr David Pang said: "Through direct investment and participation in their management, we will establish an airport system with our Mainland counterparts. This will enhance the economic development of the member airports and their respective economic regions."

Airport Authority Chairman Dr Victor Fung added that the alliance "will allow the two airports to further develop and enhance business cooperation of the two regions."