Thu, Dec 16, 2010 - Page 12 News List

EVA to buy 16% stake in China Cargo

By Lisa Wang  /  Staff Reporter

EVA Airways Corp (長榮航空), the nation’s No. 2 carrier, yesterday said it planned to acquire a 16 percent share of Chinese air cargo company China Cargo Airlines Ltd (中國貨運) for 328 million yuan (US$49.3 million) to boost its cargo business in China.

EVA Airways’ announcement comes after China Cargo said it would be integrating with another Chinese cargo company, Shanghai Airlines Cargo International Co Ltd (上海貨運航空), of which EVA Airways owns a 25 percent stake.

The investment aims to boost profits and to increase EVA Airways’ cargo network deployment in China, the firm said in a filing to the Taiwan Stock Exchange yesterday after its board approved the purchase.

“We are bullish about China’s cargo market. China Cargo Airlines is a large-scale cargo service provider in China and will provide us an edge [that will benefit our growth in China],” a company official said.

EVA Airways expects its revenue from the cargo business to grow 70 percent this year from last year, the official said, citing help from the global economic recovery.

Such growth would increase contribution of the cargo business to the firm’s total yearly revenue to about 40 percent this year, up from 33 percent last year, the company said.

The company’s revenue grew about 49 percent to NT$85.46 billion (US$2.87 billion) in the first three quarters from NT$57.41 billion last year.

The company’s board yesterday also agreed to promote president James Jeng (鄭光遠) to vice chairman and name vice president Chang Kuo-wei (張國煒) as president.

Chang, the youngest son of Evergreen Group (長榮集團) founder Chang Yung-fa (張榮發), returned to the airline company in September after stepping down as the carrier’s president four years ago.

Shares of EVA Airways rose 0.58 percent to NT$34.9 yesterday, while rival China Airlines Ltd (華航) increased 0.41 percent to NT$24.25. The benchmark TAIEX edged up 0.19 percent.

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