Cathay Pacific Cargo Air China joint venture approved by all relevant governmen

Air China (601111.SH) Board Secretary Huang Bin Nov. 15 on the "First Financial Daily" said, has been receiving a variety of government approval of a joint venture of Air China and Cathay Pacific Cargo has finally won the Development and Reform Commission plans, business All relevant Government Ministry approval, expected late this year or early next year to be formally established. February 25 this year, Cathay Pacific and Air China have jointly issued a joint venture cargo airline will be the announcement, the two companies will present a wholly owned subsidiary of Air China - Air China Cargo Co., Ltd. (the "ACC") as a joint platform. After completion of the transaction, Air China holds 51% stake in Air China Cargo, Cathay Pacific, Air China Cargo will subscribe for 25% direct equity interest in, and by providing loans to a foreign trust return for another 24% held by Air China Cargo's economic interests. Cathay Pacific joint venture transactions in the total investment 1.67 billion yuan. In addition, Cathay Pacific will sell four Boeing Converted Freighter and two reserve engines to Air China Cargo. Specific forms of cooperation for both sides, the internal high-level Air China said after the establishment of joint venture investment in the Shanghai market will be the main capacity, while the two sides also agreed, Cathay Pacific's cargo business in his gradual withdrawal over three years while the mainland's air cargo market, specializing in other international markets Mainland market mainly by the joint venture with Air China Cargo Airlines to operate at the same time, Air China will buy Cathay Pacific flights to the Mainland with the cargo belly space business. In fact in addition to all cargo operations with the air cargo business, the domestic passenger airline flights with too many carriers with a large number of abdominal compartment cargo business, the interests of this part of the distribution, air cargo business is important joint venture negotiations difficult. The industry pointed out that the industry had been rumors of the three major airlines in the air cargo business of brewing merger, how to handle their cargo belly space with the distribution of benefits is a difficult business, which also relates to who can get the ultimate ownership. This year, with the gradual recovery of the air cargo market, the three aircraft have accelerated in the expansion of its freight business, which makes the integration of the cargo had been speculation regarding the prospect of suspense.