Air China gets cash for buy out
18 / 01 / 2010
AIR China is to receive a US$220 million government subsidy to buy out Air China Cargo. However, Air China’s company secretary, Huang Bin, said that “the detailed capital injection scheme has not been confirmed yet”.The plan, which was first touted as long as April last year, would see Air China become the sole owner of the cargo carrier. Currently it holds a 76 per cent stake but with the new funding it would buy the remaining 24 per cent from the Beijing Capital International Airport’s parent company, Capital Airports Holding (CAH).Once the deal goes ahead it will leave Air China free to start the rumoured joint venture running of Air China Cargo with Cathay Pacific. How Cathay becomes a part of the venture is still open to negotiation but suggestions include it putting all of its freighters into Air China Cargo and taking a 49 per cent stake in the company.Air China Cargo currently operates services to 36 cities in 27 countries with a fleet of three 747-200Fs, six 747-400Fs and one Tupolev 204-120CE. However, with Cathay’s 25 747 freighters this would more than double its capacity.According to James Tong, chief executive officer of the Hong Kong-based Dragonair, Air Cargo China’s headquarters will be in Shanghai, to make use of international direct routes in the city, instead of its current location in Beijing.