Japanese regional airlines Airdo Co. and Solaseed Air Inc. said Monday they will set up a holding company in October 2022 to reduce costs through joint aircraft maintenance and procurement of supplies.

As part of efforts to improve their financial standing, hit hard by the coronavirus pandemic, Airdo and Solaseed also said they will raise 7 billion yen ($64 million) and 2.5 billion yen, respectively, in fresh capital, by issuing preferred shares to the state-backed Development Bank of Japan and regional banks.

Airdo, headquartered in Sapporo in the country’s northernmost major island of Hokkaido, and Solaseed Air, based in Miyazaki in the southwestern region of Kyushu, will maintain their company names even after the establishment of the holding company.

The two regional airlines have accepted capital injections from the DBJ and ANA Holdings Inc. while expanding their businesses through code-sharing flights with the major Japanese carrier.

In the business year ended March, Airdo and Solaseed Air incurred a net loss of 12.18 billion yen and 7.69 billion yen, respectively, as air travel fell sharply due to the pandemic.