Wednesday, November 17, 2010

Airlines Forge Ahead In New Chinese Freight Venture

New Service to Start 'Within Two Months'
Shipping News Feature

CHINA – The agreement signed in February between Air China and Cathay Pacific to establish a jointly owned cargo airline look about to come to fruition. The existing airfreight carrier Air China Cargo Co Ltd (ACC), previously a wholly owned subsidiary of Air China, has been split between the two companies with Cathay investing around $260 million for their share.

This week a Cathay Pacific spokesman said the new service will commence by 1st January 2011 in a move which firms up already tight links between the two. Air China owns around 30% of Cathay with a 19% ownership the other way. The new venture has been officially approved by the Chinese government. ACC currently operates seven Boeing 747 freighters to fourteen global destinations and Cathay Pacific say they will also sell four freighters and two spare engines to ACC. ACC also acts as sales agents for the considerable cargo space available on Air China’s domestic and international passenger flights.

These are good times for Cathay, this week they announced the year-end salary increment for its Hong Kong-based staff together with details of a discretionary 13th month payment and a further profit share in light of the company’s continued strong performance this year. The company has promised increases up to 4.5% in salary with eligible staff receiving profit shares equivalent to three weeks wages and forecast annual profits of at least $1.6 billion.