CHINA: Air China/Cathay JV clears hurdle

The proposed airfreight joint venture (JV) between Air China and Cathay Pacific has been given approval by China’s National Development and Reform Commission, but the deal still needs confirmation from the Chinese Ministry of Commerce that it meets anti-trust requirements. With this recent approval the Shanghai-based JV, 51 per cent owned by Air China and […]


The proposed airfreight joint venture (JV) between Air China and Cathay Pacific has been given approval by China’s National Development and Reform Commission, but the deal still needs confirmation from the Chinese Ministry of Commerce that it meets anti-trust requirements.

With this recent approval the Shanghai-based JV, 51 per cent owned by Air China and 49 per cent by Cathay Pacific, could be in place as soon as the fourth quarter this year, say industry analysts. Initially four of Cathay’s B747-400 freighters will be transferred to the JV. Air China, one of the top three carriers in mainland China, owns 30 per cent of Hong Kong-based Cathay. In a strategic cross-shareholding arrangement agreed to four years ago, Cathay increased its stake in Air China and took full control of its Hong Kong Dragon Airlines (Dragonair) subsidiary.

The cargo collaboration, operating on an Air China Cargo (ACC) platform, will open the way for Cathay into the mainland Chinese freight market, especially in the Yangtze River Delta region.

Some of this capacity also could be deployed to Europe, but the European Commission already gave the JV its blessing in June, saying it would not hurt competition in Europe. It said the combined market share of Air China and Cathay Pacific on Asia-Europe routes was "limited".