EVA buys 16pc in China Cargo Airlines

TAIWAN's leading air carrier EVA Airways is to buy a 16 per cent stake in Shanghai-based China Eastern Airlines cargo division of China Cargo Airlines (CCA) at an investment of CNY328 million (US$49 million) along with fellow investors Singapore Airlines Cargo (SIA) and COSCO.

The deal followed China Eastern's merger with Shanghai Air and the subsequent withdrawal by EVA's cargo unit Concord Pacific 25 per cent bid in Shanghai Air. China Eastern share in CCA will now drop from 70 per cent to 51 per cent and COSCO will decrease to 17 per cent from 30 per cent while SIA will own a 16 per cent stake along with EVA cargo unit.

In a report from UK-based Aircargo News EVA Airways forecasts a cargo business revenue boost of 70 per cent in 2011 up from this year's 40 per cent and 2009's 33 per cent total revenue.

"We are bullish about China's cargo market. China Cargo Airlines is a large-scale cargo service provider in China and will provide us an edge [that will benefit our growth in China]," said a spokesperson in the report of a company's whose total revenue was up year on year to NT85.4 billion (US$2.8 billion) from NT$57.4 billion ($1.9 billion).

China Eastern's cargo operations are to be bolstered by its takeover of Shanghai Air with its freight unit, CCA and Great Wall Airlines making it a staunch competitor to Hong Kong-based Cathay Pacific Airways and Air China's cargo venture launching end of year.

Final approval of China Eastern's three cargo operations is expected next month said its board secretary Luo Zhuping. According to a Bloomberg report HK-based analyst at Daiwa Institute of Research said operating three companies under one umbrella will save on costs.
(Source:www.schednet.com)