New ground handling business formed for Shanghai airports

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Air China, Hong Kong Airport Services, Shanghai Airport Authority and Shanghai International airport have formed an airport ground handling joint venture.

Named Shanghai International Airport Services, it will provide airport ground handling services at Shanghai Pudong International airport and Shanghai Hongqiao International airport.

Shanghai International airport will be the largest stakeholder in the venture with a 41% stake, followed by Cathay Pacific's wholly owned subsidiary Hong Kong Airport Services with 25% and Air China with 24%.

Shanghai Airport Authority, the majority shareholder of Shanghai International airport, will own the remaining 10%.

The joint venture will have total capitalisation of CNY360 million ($57 million).

The agreement will also see Shanghai Airport Authority and Shanghai International Airport transfer their existing airport ground handling services contracts, including those in respect of Cathay Pacific and its sister airline Dragonair, to the joint venture.

Air China will also move its relevant ground handling business to Shanghai International Airport Services at a later time.

Pending approval by the relevant Chinese government authorities, the company is expected to commence operations in the third quarter of 2012.