Cathay to buy partner DHL's stake in Air Hong Kong
10 / 07 / 2017
Asian airline Cathay Pacific is to buy the 40% stake held in freighter carrier Air Hong Kong (AHK) by joint venture partner DHL, the German-owned global logistics and express parcels operator.
Cathay Pacific currently owns 60% of the AHK stock.
In a Hong Kong Stock Exchange filing, Cathay Pacific and DHL confirmed that they have entered into a non-binding memorandum of Understanding that will see AHK and DHL enter into a sale and leaseback transaction for the freighter assets.
The statement said that eight Airbus A300-600F freighter aircraft and associated equipment will be sold by AHK to DHL under the transaction.
As part of the deal, AHK and DHL will enter into the block space agreement. Under the old block space agreement, AHK sells space to DHL on an agreed network of overnight freight routes.
The announcement stated: “It is contemplated that the above transactions will take effect on and from the expiry on 31st December 2018 of the Joint Venture Agreement and the Old Block Space Agreement.”
It added: “Under the Block Space Agreement, it is contemplated that AHK will operate an agreed freighter network to destinations in Asia for DHL and will receive agreed service fees and reimbursement of operating expenses.”
On its website, Air Hong Kong states that it is “the only dedicated freighter airline based in Hong Kong”.
In October 2002, Cathay Pacific entered into a business partnership with DHL Express to develop the express freight network in Asia. Air Hong Kong now serves Bangkok, Penang, Singapore, Taipei, Narita, Kansai, Nagoya, Seoul, Shanghai, Beijing and Manila.
Air Hong Kong was the launch customer for eight Airbus A300-600Fs which entered into service between September 2004 and July 2006.
In May 2011, AHK received a capacity boost by dry-leasing three Boeing 747-400 Boeing Converted Freighter aircraft.
The AHK website states: “DHL Express is our major customer and the bulk of the cargo is express parcels. The remaining cargo is general freight.
“Air Hong Kong operations benefit businesses both in Hong Kong and around Asia by offering superior services via the Hong Kong hub and contributes to making Hong Kong the leading air cargo hub and logistics centre in Asia.”