China Eastern Airlines and China Ocean Shipping have stated they will inject funds into their joint venture China Cargo Airlines. It is hoped the CNY2.05 billion ($308 million) cash injection will be used to acquire cargo transportation businesses and related assets from two other airlines following rising competition from Beijing-based Air China.
Hong Kong- and Shanghai-listed China Eastern said Singapore Airlines Cargo, a unit of Singapore Airlines, and Concord Pacific, a wholly owned unit of Taiwan-based EVA Airways, will each invest CNY328 million to take a 16% stake in China Cargo Airlines. China Eastern will invest CNY1.05 billion in the cargo carrier and its stake will fall to 51% from 70%, while Cosco will invest CNY348.5 million and its stake will fall to 17% from 30%.
China Cargo Airlines will acquire core air cargo transportation businesses and related assets from Shanghai Cargo Airlines International and Great Wall Airlines for a preliminary combined price of CNY416.2 million.