China Eastern Air Holding Company has signed an agreement for a joint venture to be invested in by China Eastern Airlines Corporation and the Yunnan State-owned Assets Supervision and Administration Commission of the Yunnan provincial government.

In cooperation with the government, the joint venture, formerly China Eastern's Yunnan Branch, will gain advantages in policy support, airport cooperation, project construction, and the ability to resist risks. The joint venture will be a regional hub and a network-based airline company.

In late May, China Eastern's Yunnan Branch took delivery of a new Boeing 737-700 and the company's fleet now has 37 aircraft. By 2010, the company will have 50 aircraft, the annual passenger traffic will increase from 6 million to 8 million, and interline and transit flights will be increased by 500.