[photopress:logistics_air_china_cargo_1_2_3.jpg,full,alignright]Air China aims to make Air China Cargo a wholly owned subsidiary. To do that it is negotiating with Beijing Capital Airport to buy its 24% stake in the country’s largest cargo carrier.
China Airlines Board Secretary Huang Bin said, ‘We did talk with Beijing Capital Airport about the purchase of their shares in the Air China Cargo carrier, but so far no substantial progress has been made.’
In December, China Airlines announced plans to raise its stake in Air China Cargo to 76% from 51% through the purchase of Gold Leaf Enterprise Holdings’ stake in Air China Cargo shareholder Langxing Co.
In one sense this all looks a bit odd because Beijing-based Air China Cargo has had operating losses in recent years and reported a net loss of RMB382 million ($53.4 million) in the first nine months of 2007.
China Airlines, in explaining this, referred to ‘an increase of freighters that resulted in low aircraft utilization rates’ and ‘management problems.’
Note that China Airlines brought up the possibility of a cargo joint venture with China Eastern Airlines when discussing its recent bid for its rival.
China Eastern runs a profitable subsidiary in China Cargo Airlines so if Air China had been able to cooperate with China Eastern Airlines in reorganizing Air China Cargo to work with China Cargo Airlines successfully it might be possible, at a later date, to merge the two.
All of this appears to be on hold until August because China Eastern says it has a legally binding agreement with Singapore Airlines to do nothing until then.
There will be much more negotiating before this little lot is brought to a successful conclusion.
Source: ATW Daily News