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Air China expands cargo role

AIR China has agreed to expand its stake in a cargo venture to 100 percent up from 76 percent in anticipation of a growing cargo business in China.

The Beijing-based carrier will pay 718 million yuan to Capital Airports Holding Company, the parent of Beijing Capital International Airport Co, for a 24-percent stake in International Cargo Transport Ltd of China, it said in a statement to the Shanghai Stock Exchange today.

The carrier plans to inject more resources into the venture as part of its strategic measures to boost investments in the air cargo industry, the statement said.

The cargo venture was set up in 2003 by Air China, CITIC Pacific Ltd and Capital Airports Holding Company, with a registered capital of 2.2 billion yuan. Air China held 51 percent.

Last year, Air China bought a 25 percent stake in the cargo venture for 857 million yuan from CITIC Pacific to expand its stake to 76 percent.

By the end of last year, the cargo venture's total assets reached 5.14 billion yuan and debts totaled 3.19 billion yuan.

It booked an unaudited profit of 41 million yuan and revenue of 7 billion yuan last year, the statement said without giving a comparative figure.

China aims to increase cargo and mail volume by 8 percent to 4.37 million tons this year, compared with 0.2-percent growth of last year, according to the Ministry of Transport.

The civil aviation regulator has issued policies to stimulate the domestic aviation industry, which has been dampened by the financial turmoil, declining demand and sharply fluctuating oil prices.

Cargo volume in the domestic market rebounded for the first time in February since July last year, rising 7.4 percent to 195,195 tons.


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