Sale may herald Chinese consolidation
30 / 11 / 2009
CHINESE logistics giant, Sinotrans, may sell all or some of its 51 per cent controlling stake in its struggling Grandstar Cargo International Airlines joint venture.Sinotrans started the cargo carrier last year with, among other investors, Korean Air, but Grandstar has yet to make a profit or expand beyond its Tianjin-Frankfurt route. Sinotrans posted a third quarter loss of CNY61.8 million (US$9 million) on the investment.Contenders to buy the stake include favourite China Eastern Airlines or Air China. China Eastern is already the controlling shareholder of China Cargo Airlines, which, having just merged with Shanghai Cargo Airlines, has opened up China Eastern to acquiring the parent company Shanghai Airlines.The Civil Aviation Administration of China (CAAC) has recently decided to encourage the merger and reorganisation of domestic airfreight companies to consolidate the market.