China’s HNCA, Luxembourg strike deal on Cargolux

Chinese investment group, Henan Civil Aviation Development and Investment Company (HNCA), the investment vehicle of the Chinese province of Henan, has been given the green light to purchase the 35 per cent shareholding up for sale in state-owned Cargolux.


China’s HNCA Luxembourg strike deal on Cargolux


Chinese investment group, Henan Civil Aviation Development and Investment Company (HNCA), the investment vehicle of the Chinese province of Henan, has been given the green light to purchase the 35 per cent shareholding up for sale in state-owned Cargolux. Xavier Bettel, the incoming prime minister of Luxembourg, informed parliament of the decision in a speech on 29 November with the Cargolux board giving its blessing on 13 December.

Bettel also told parliament that HNCA had committed to pay US$231 million for the stake and includes an undisclosed amount to cover marketing and support costs for the launch of Cargolux’s four-times weekly service between Luxembourg and Henan’s capital Zhengzhou.

The agreement is also said to include a plan for HNCA and Cargolux to set up a joint venture carrier based in Zhengzhou with a commitment of not less than one third of the Cargolux fleet to be allocated to CGO. The joint venture carrier will operate under a Chinese AOC and will carry the CGO code. Once established, Cargolux will assign management and operational personnel to participate in the management of the new carrier. In a dual-hub strategy, LUX will operate as the European hub while CGO will become the Asia Pacific hub.