China merger move to impact Cathay?

: Latest News; Thursday, 27 May 2010

While Hong Kong-based Cathay Pacific and Air China continue work on their joint venture cargo airline plans, the Chinese government has launched an initiative to push the country's three major airlines into merging their cargo operations.

The South China Morning Post says the initiative affects Air China, China Eastern and China Southern and that a preparation team already has been formed to work out details.

A Cathay spokesperson said the target of having its Air China joint venture in operation by late July or August remained unchanged.

Cathay has already agreed to take a 49 per cent stake in Air China Cargo, but the venture is subject to final approval by the central government.

About 70 per cent of the international air cargo in China is carried by foreign carriers. The three domestics carry the remaining 30 per cent.

It is believed that local Chinese exporters would support a local mega carrier.