SHANGHAI, March 22 (Reuters) – Air China will invest 682.1 million yuan ($99.9 million) in Shenzhen Airlines, increasing its stake in the airline to 51 percent and firming its foothold in southern China.

Air China, the country's flag carrier, already owned a 25 percent stake in privately run Shenzhen Air, but by taking control of the company will be better placed to compete with rival China Southern Air in the south of the country.

The investment is expected to be completed by April 19, the company said in a stock exchange filing.

The deal, which already has the approval of the country's aviation regulator, will improve the financial situation of Shenzhen Air, which booked a 864 million yuan net loss in 2009, the statement said.

Beijing-based Air China is keen on mergers and acquisitions at home and abroad as it expects earnings to improve in 2010.

It recently launched a Shanghai-based cargo venture with Cathay Pacific Airways Ltd , gaining a foothold in east China, where rival China Eastern Airlines dominates.

China Total Logistics, a subsidiary of Shenzhen International Holdings Ltd , also plans to invest 348 million yuan in Shenzhen Air, raising its stake in the carrier to 25 percent from 10 percent, the statement said.