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Cathay, Air China cargo venture taking shape
POSTED: 8:57 a.m. EDT, October 16,2007
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Cathay Pacific and Air China are working out details of a joint cargo airline based in Shanghai, but it is unlikely to launch before next year.
Under the plan, Cathay Pacific would have a 49 percent interest in the airline and Air China 51 percent. Both airlines already have reciprocal 17.5 percent shareholdings in each other.
The companies are discussing whether Cathay Pacific would be bringing some of its existing cargo planes to the venture.
Cathay said finding capacity for a new airline is particularly tough in the cargo sector at the moment because there is a bit of a capacity crunch in cargo business as older aircraft such as the Boeing 747 Classic are rapidly becoming too expensive to operate due to high fuel consumption and costly maintenance.
Cathay has 11 of the aircraft and will be retiring them in the coming years. At the same time, the airline is converting some of its 747 passenger jets into freighters and will take delivery of three extended range Boeing 777s next year and another three in 2009.
Cathay hasn't ordered any double-decker Airbus A380s so far but has not ruled out the possibility. The airline has studied the aircraft very carefully to see how it would fit into Cathay¨s operations.
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