EU clears Cathay to buy stake in Air China cargo unit

EUROPEAN anti-competition regulators have given Hong Kong's Cathay Pacific Airways the nod to acquire a stake in Air China's cargo unit, saying the deal would not hurt competition in Europe.

Cathay Pacific announced in February that it would form a joint venture with Air China to capture the lucrative air cargo business in two top Chinese manufacturing centres, said Agence France-Presse.

AFP said the European Commission concluded that the combined market share of Air China and Cathay Pacific on the routes between Asia and Europe was "limited."

The commission said "competition in this market will remain strong after the transaction, notably due to the presence of many large international airline companies active on the same routes."

The agreement would enable the two airlines to capitalise on the rebound in China's exports as Western economies begin to recover.

Under the deal, Cathay would acquire a 49 per cent stake in Air China Cargo (ACC), the platform for the joint venture, for CNY1.7 billion (US$249.01 million), the Hong Kong company has said.

ACC is currently wholly owned by Air China, one of the country's largest carriers and the second largest shareholder of Cathay. It will start operations as a joint venture airline in the summer, with Beijing and Shanghai remaining as its principal bases, the report added.
(Source:www.schednet.com)