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            september 21, 2019

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Air China intends to offload its stakeholding in its air frieght division


Air China Ltd plans to sell a 51 per cent stake in Air China Cargo to a sister unit for CNY2.44 billion (US$357 million) in order to fix its focus more firmly on its passenger unit, according to Shipping Gazette.
The airline said that while Air China Cargo's profitability had improved, intensifying competition, exchange rate fluctuations and the complicated international trade situation had created many uncertainties, reported Reuters.
"Therefore the sale of Air China Cargo is the company's strategic and rational response to the air cargo market's uncertainties, to strengthen the stability of the company's operations," it said.
Following the sale to the unit Capital Holding, which is fully-owned by Air China's controlling shareholder China National Aviation Holding Company, Air China said it would put more resources into its passenger business to improve competitiveness.
Air China Cargo's other shareholders, including Cathay Pacific Airways, have priority to purchase the stake or sell their shares with Air China, however, the companies have yet to waive or exercise those rights, the company said, adding the deal still must be approved by shareholders.
The deal comes as Beijing has been implementing mixed-ownership reforms aimed at bringing private sector money into government-run companies in a bid to revamp the nation's bloated and debt-ridden state sector.
Air China achieved first-half profit attributable to shareholders of CNY3.47 billion, up from CNY3.33 billion in the same period last year, on 12 per cent higher revenue.
It was helped by factors such as stronger cargo revenues as well as improved performance at its associates and joint ventures including Cathay Pacific, which reported a narrower first-half loss.

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