EVA, China Eastern cargo merger gets greenlight

TAIWAN’S EVA Airways has agreed to buy 16 per cent of China Eastern Airlines’ cargo division for 328 million yuan (US$49 million). China Eastern is restructuring its freight operations after its takeover of Shanghai Air in January 2010.
As part of the deal, EVA will stop its current joint operations with Shanghai Air, of which it owned 25 per cent.
Nothing now stands in the way of China Eastern consolidating the three airlines’ cargo operations: China Cargo, Shanghai Air’s freight business and Great Wall Airlines. China Eastern board secretary, Luo Zhuping, said final approval was expected later this month but would not reveal any more details of the planned end operations.
“We are bullish about China’s cargo market. China Cargo Airlines is a large-scale cargo service provider in China and will provide us an edge [that will benefit our growth in China],” an EVA company spokeperson said.
EVA Airways forecasts its cargo business revenue will grow 70 per cent next year. This year, the carrier’s cargo contributed 40 per cent of its total revenue, up from 33 per cent in 2009 from last year. Total revenue for the first three quarters of this year rose to NT$85.4 billion ($2.8 billion) from NT$57.4 billion ($1.9 billion) last year.
As part of its plans, EVA has promoted president James Jeng to vice-chairman and vice-president Chang Kuo-wei to company president.