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CAL awaits Beijing's vetting of stake

China Airlines Ltd (CAL, 華航) said yesterday that it was waiting for a response from Beijing after the government approved its investment in a cargo airline in China.

China Airlines will pay US$40 million for 25 percent of Yangtze River Express Airlines Co (揚子江快運), a wholly owned unit of China's Hainan Airlines Co (海南航空), the Ministry of Economic Affairs' Investment Commission said in a statement on Wednesday.

Local airlines have been aiming to expand their cargo operations in China, as domestic air cargo volume is shrinking.

The commission said that two shipping companies, Yang Ming Marine Transport Corp (陽明海運) and Wan Hai Lines Ltd (萬海航運), would also be allowed to invest in the Chinese company.

Yang Ming Marine, the nation's second-largest shipping company by fleet size, will pay US$19.2 million for its stake, while Wan Hai will pay US$9.6 million, the commission said.

Yang Ming Marine said earlier it planned to take a 12 percent stake in Yangtze River Express, while Wan Hai said it planned to buy a 6 percent stake.

Local media reported in September that Yang Ming Marine, Wan Hai Lines and Luxembourg's Cargolux Airlines International SA planned to jointly buy a stake of 49 percent in the company. Cargolux later pulled out of the deal.

CAL is now waiting for the Beijing authorities to approve the deal, a company spokesman said.
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