CHINA: China to merge air cargo carriers: Sources

The Chinese government is aiming to have one key domestic carrier among the top five global cargo players within three years. China’s central government has intensified its pressure on Air China, China Eastern Airlines and China Southern Airlines to merge their cargo operations to compete with foreign carriers who dominate the market, the South China […]



The Chinese government is aiming to have one key domestic carrier among the top five global cargo players within three years.

China’s central government has intensified its pressure on Air China, China Eastern Airlines and China Southern Airlines to merge their cargo operations to compete with foreign carriers who dominate the market, the South China Morning Post reported, citing sources close to the matter. The news comes after Payload Asia reported last month on an air cargo blueprint unveiled by government officials in Beijing in April aimed at securing a larger share of China’s air cargo market by domestic players, including establishing one key Chinese cargo carrier among the top five global players by 2013.

An unspecified senior official at China Southern was quoted by the Hong Kong-based newspaper as saying: “A preparation team has been formed recently to work out the details of the consolidation.” The task force is said to have been formed by State-owned Assets Supervision and Administration Commission (Sasac) and comprises government officials and airline executives who have been tasked with working out the form and share holding structure of the new cargo airline.

Another unidentified source was quoted as saying that the proposed new airline would be based in Shanghai, China’s most lucrative air cargo market. However, such a venture would cast doubts over the viability of Air China’s cargo tie up with Cathay Pacific in which Cathay had agreed in February, to take a 49 per cent stake in Air China Cargo. While the deal is still pending final state approval. A Cathay spokesperson said the target of having the joint venture carrier coming into operation in late July or August remained unchanged.