CITIC Pacific wants to add mainland Chinese aviation investments to its stake in the Hong Kong airline sector, taking advantage of the pace of restructuring and regulatory change in China.
The Hong Kong-listed conglomerate says investments could be made directly in airlines (especially cargo carriers) and airports, or through joint ventures with mainland partners.
CITIC, which is backed by Beijing's China International Trust & Investment, already owns more than 25% of Cathay Pacific Airways, 28.5% of Dragonair and 10% of Hong Kong Air Cargo Terminals. It posted a 16% leap in net profit last year, with the contribution of aviation interests more than doubling to HK$1.475 billion ($190 million).
China is working to open its airlines and airports to foreign ownership as it prepares for World Trade Organisation membership. It is also restructuring its regulatory system and forcing airline consolidation, with the Civil Aviation Administration of China (CAAC) set to surrender ownership of 10 airlines after they are merged into three groups.
CITIC clashed publicly with CAAC's commercial arm, China National Aviation (CNAC), over control of Hong Kong's aviation industry prior to China's 1997 takeover of the then UK colony.
A compromise in 1996 saw CITIC, Cathay and Cathay's parent Swire Pacific sell a joint 35.86% holding in Dragonair to CNAC (later raised to 43%) in return for a pledge that the latter would not launch a competing airline in Hong Kong.
Source: Flight International
