China Eastern Air Holding Co and its same-city peer Juneyao Group have announced to upgrade their partnership through stake purchases and in-depth collaboration, according to a strategic agreement signed Friday.

China Eastern will issue 7.46 billion yuan ($1.049 billion) worth of directional shares for entities under Juneyao Group to purchase and listed Juneyao Airlines will issue 2.1 billion yuan shares for China Eastern to invest, said a China Eastern Airlines statement on Tuesday.

After the completion of the equity transactions, China Eastern will acquire a 15 percent stake in Juneyao Airlines and Juneyao Group will own a 10 percent stake in China Eastern Airlines, which represents the largest equity trade in the Chinese aviation sector to date, said Liu Shaoyong, China Eastern chairman.

In addition to the share deals, the two carriers will send board members to each other, as well as strengthen ties in business models, flights networks, and aviation products and services, according to their agreement.

Wang Junjin, chairman of Juneyao Group and Juneyao Airlines, said the two sides will explore opportunities under the Belt and Road Initiative, the integration of the Yangtze River Delta region, and Shanghai's development into an international aviation hub.