Air China, Cathay Pacific launch cargo JV

Air China (CA) and Cathay Pacific Airways (CX) announced a formal launch of their joint venture cargo operation on Wednesday. The JV, called Air China Cargo, consolidates the two carriers' airfreight divisions.

Air China is a major (29.99%) stake holder in Cathay Pacific.

The JV was cleared by the Chinese government last year.

While CA will own a majority 51% stake in the consolidated cargo carrier, CX will hold 25% and will also fund an offshore trust will hold 24%.

Air China Cargo's fleet will be based at Shanghai and will comprise of 12 Boeing 747-400 freighters, according to joint statement issued by the airlines.

"The consolidation of Air China and Cathay Pacific's cargo businesses is part of the two airlines' long-term cooperation strategy," the joint statement said. "This latest collaboration will increase fleet development and strengthen the market position of both airlines. The operation centre in Shanghai will satisfy the market demands of the Yangtze River Delta, which makes up two-thirds of Air China's service area. The cooperation will help Air China Cargo reach all-round global development."

There ACC board will have seven directors. Four, including the chairman, will be appointed by Air China, while three, including the vice chairman, will be appointed by Cathay.