Four carriers bid to be part of Xiamen Gaoqi venture

China Airlines (CAL) and EVA Airways are among four Taiwanese companies jointly seeking a 49% stake in a cargo services project at China's Xiamen Gaoqi International Airport in a politically charged move that could eventually pave the way for a resumption of direct flights.

Construction of the cargo handling, storage, transportation and related services project is due to begin in July, with operations starting around July next year.

Taipei-based China Airlines (CAL), EVA Airways, Far Eastern Air Transport and Taiwan Airport Service all hope to be involved, with individual stakes of between 12% and 16%.

Delays could occur if the companies' boards are slow to approve the 220 million yuan ($27 million) project, which will be 49%-owned by the Taiwanese firms and 51% by Xiamen airport. Taiwan's authorities should back the project, however, as it is seen as a key step towards warming relations with China. Taiwanese companies need government approval to invest in China - an island considered a renegade province by Beijing.

It is hoped that growing investment will bring the two sides closer, paving the way for a resumption of direct flights, banned since 1949.

Despite the absence of direct flights, forcing passengers travelling between Taiwan and China to stop over in Hong Kong or Macau, airlines from both sides have been forging ties in recent years. Taiwanese carriers have opened offices in China and have agreed with major Chinese airlines through check-in arrangements for flights transiting through Hong Kong.

CAL, meanwhile, hopes to finalise a deal later this year to take a 25% stake in Shanghai-based China Cargo Airlines for $60 million. Talks with 70% owner China Eastern Airlines stalled late last year after becoming bogged down, largely due to opposition from Taiwanese politicians.

The carrier says talks have been revived and CAL hopes a deal can be done by the end of this year. Chinese authorities have already said they are in favour of a deal buy-in by CAL.

Source: Flight International