The Airport Authority and Hangzhou Xiaoshan International Airport Company have inaugurated their Chinese-foreign join-venture company after completing all official approval procedures and capital injection.

It will carry out the RMB6.8 billion second-phase expansion plan for the Xiaoshan International Airport.

The plan has 2011 as its target completion date. It includes the construction of a 4F-grade runway which can accommodate super jumbos like the A380, a new international passenger terminal, the second domestic passenger terminal and other related facilities.

The expansion will boost the airport's annual handling capacity to 25.6 million passengers, 500,000 tonnes of cargo and 260,000 aircraft movements by 2015.

Airport Authority Chairman Dr Victor Fung said the venture will greatly enhance the two airports' competitiveness by combining Hong Kong's sprawling international network with Hangzhou's extensive domestic coverage.

Hangzhou and Hong Kong airports shareholders signed the agreement for a capital increase subscription of Hangzhou Xiaoshan International Airport Company in Hangzhou in April last year, to invite the Airport Authority to become a strategic investor for the airport's management.

Under the agreement, the company will be transformed from a state-owned limited company into a limited liability joint-venture company with a registered capital of almost RMB5.7 billion yuan.

The Airport Authority now holds 35% equity interest in the company, having invested RMB1.99 billion. It has appointed four members to the new company's board.