Andrzej Jeziorski/SINGAPORE
Taiwanese carrier China Airlines (CAL) is in talks to take an unspecified stake in mainland Chinese cargo operator China Cargo Airlines, which is majority-owned by China Eastern Airlines. CAL confirms that a deal "is under negotiation".
CAL says the investment would open "a whole new market", with international air cargo traffic through mainland China expected to grow at about 17% a year over the next 10 years. Reports suggest CAL is targeting a 25% stake in Shanghai-based China Cargo, expanding its capital from 500 million yuan ($60 million) to 1.5 billion yuan, although it will not confirm this.
China Cargo was established in July 1998 as a joint venture between China Eastern, which holds 70%, and China Ocean Shipping, and any deal will be subject to government approval.
If the acquisition goes ahead, it will be the first investment by a Taiwanese company in a mainland airline. Beijing and Taipei are still discussing the possibility of opening direct air links. Beijing regards the island as a rogue province.
CAL admits its plans could be delayed by recent management upheavals, which saw the replacement of its president Sandy Liu and chairman Chiang Hung-i (Flight International, 18-24 July). The new management may decide to review the scheme, despite approval for plans to invest up to $60 million each year into mainland China.
China Cargo serves mainly long-haul routes to the USA, Japan, South Korea and France using cargo-converted Boeing MD-11s from China Eastern's fleet. CAL operates 13 freighters, and is to receive two more Boeing 747-400Fs this month and next.
• Malaysia Airlines (MAS) and Qantas will not comment on a report in the Malaysian Business Times that the Australian carrier is to buy part of majority shareholder Naluri's 29% stake in MAS. The report quotes industry sources as saying that talks are under way.
Source: Flight International
