China Eastern offloads China Cargo shareholding
14 / 02 / 2017
China Eastern Airlines has completed the sale of its shareholding in freighter operator China Cargo Airlines in order to concentrate on its passenger business.
The deal sees China Eastern sell its 100% shareholding in Eastern Logistics, which in turn owns 83% of China Cargo Airlines.
Eastern Logistics - and its China Cargo Airlines shareholding - was bought by Eastern Airlines Industry Investment Company, a wholly-owned subsidiary of state owned CEA Holdings for RMB2.4bn.
After the sale, China Cargo Airlines will also sell the bellyspace of China Eastern.
In a statement, China Eastern said the would allow it to "focus on air passenger transportation business, further foster its reform and transformation, improve the operating and management ability of the Company in respect of air passenger transportation business and strive to create better investment returns for shareholders".
In a previous statement, announcing the sale plans, the airline said that Eastern Logistics had not completed the goals of a transformation project.
“In particular, China Cargo Airlines, a subsidiary of Eastern Logistics, suffered large amount of cumulative losses during the period from 2011 to 2015, translating to a relatively high debt ratio that affected the overall operating performance of [China Eastern]," the company said at the time.
“Therefore, the implementation of the disposal is a specific measure and reasonable option for the [China Eastern] to cope with the poor conditions of the airfreight market and is beneficial in improving the overall operational performance of [China Eastern].”
According to Air Cargo News' freighter fleet directory, China Cargo operates a fleet of two B747-400Fs, two B747-400Fs that use side cargo doors and six B777 freighters.
Last year, China Eastern registered an increase in cargo demand of 0.2% for the year to 4.9bn revenue freight tonne km. This is the airline’s second annual improvement in a row, but is down on 2015’s improvement of 1.3%.