Air China Cargo to receive CNY2 billion injection

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Air China, Cathay Pacific and Fine Star Enterprises are planning to inject a further CNY2 billion ($328 million) into their Air China Cargo joint venture.

In a statement to the Hong Kong stock exchange, Air China says that its board has approved a capital injection of CNY1.02 billion. Cathay will meanwhile contribute CNY500 million and Fine Star CNY480 million.

The company adds that the plan is still in negotiations, and no formal agreement between the shareholders has been reached.

Fine Star is a subsidiary of Air China’s parent company, China National Aviation Holding.

Air China adds in the statement that its board has authorised Air China Cargo’s management to “deal with all matters in connection with the Capital Injection Plan, including but not limited to negotiation, disposal of aircraft and execution of relevant documents.”

Last March, Cathay announced that Air China Cargo would take over an order for eight Boeing 777Fs and return four 747-400BCFs to the manufacturer. The transaction has not been confirmed by the manufacturer.

Air China owns 51% of the cargo operation, with Cathay holding 25% and Fine Star the remaining 24%.