Air China and Cathay Pacific, Hong Kong’s airline and largest carrier, seem to be going into a joint air cargo venture. Air China will bring seven air freighters while Cathay, it is reported, will be putting up five or six planes.
Talks first began in 2006 alongside a larger deal centered on Cathay’s acquisition of Hong Kong Dragon Airlines.
Jack Xu, an analyst at Sinopac Securities Co. in Shanghai, said, “Shanghai is the most important cargo market among Chinese cities. It’s a positive move for both airlines that helps them challenge China Eastern-Shanghai Air.”
China Eastern Airlines Corp. completed the acquisition of neighbor Shanghai Airlines.
Air China Board Secretary Huang Bin and Cathay Pacific spokeswoman Carolyn Leung both said that talks were under way.
It is probable that Beijing-based Air China will own 51% of the new cargo venture, with Cathay Pacific owning 49%.
BusinessWeek reported Air China is Cathay Pacific’s second-largest shareholder with a 30% stake. Cathay Pacific owns 18% of Air China, the nation’s largest international carrier.