Green light for Air China, Cathay joint venture
31 / 08 / 2010
AIR China has received approval to start an air cargo joint venture with Cathay Pacific Airways. Permission from China’s National Development and Reform Commission was the final obstacle to starting operations in the last quarter of the year.
Negotiations between the Chinese flag carrier and Cathay Pacific, in which Air China owns a 30 per cent stake, have been on going for four years, although the plans crystallised in February this year.
The Air China Cargo division will form the foundation of the venture, with Air China owning 51 per cent and Cathay Pacific 49 per cent.
The division said revenues from cargo increased 127 per cent in the first half of the year, compared to last year, reaching US$656 million. Capacity increased 21 per cent and yield 45 per cent.
Air China’s chairman, Kong Dong, said: “In the second half of the year, the global economy is expected to continue its recovery while the domestic economy is expected to maintain a stable growth trajectory, providing favourable market conditions for Air China.
“However the possibility of a ‘double-dip’ in the global economy, the rise of high-speed-rail, oil prices, as well as fluctuations in exchange rates and interest rates all contribute to a certain level of uncertainty in our operations,” he added.