Wed, May 30, 2001 page17

• CAL okays air terminal investment

  CARGO The board of directors of China Airlines approved plans to invest US$3.5 million in a freight terminal in Xiamen

  • By Richard Dobson / STAFF REPORTER
  • • 
    • 
    • 

  China Airlines (中華航空) is consolidating plans to establish a foothold in the Chinese air freight market with the board of directors last week approving a US$3.5 million investment in a cargo terminal at Xiamen's Gaoqi Interna-tional Airport (高崎機場).

  Company spokesman Paul Wang (王振畬) told the Taipei Times yesterday that the investment by China Airlines, which is Taiwan's largest air carrier, would represent only 12 percent of the total cost of building the cargo terminal at what is now one of China's largest international airports.

  The proposal comes alongside plans to purchase from Shanghai-based China Eastern Airlines (中國東方航空) a 25-percent stake in China Cargo Airlines (中國貨運航空) and will further the company's intention to establish a stronger presence in the Chinese air cargo market, which analysts predict is set for dramatic growth.

  "We see the long-term growth potential as being quite dramatic as the economy becomes more sophisticated and the manufacturing base ... becomes more extensive and more focused on the higher value added part of the supply chains," said Peter Negline, a regional airline analyst at JP Morgan Hong Kong.

  While not a large investment, Negline sees it as an important strategic move.

  "It's quite an important toehold ... cargo terminal investment is clearly important and hopefully it's going to be an indication of future opportunities of growth for them, assuming they get the rights to fly to Xiamen to run their own cargo volumes through that facility," he said.

  The Xiamen investment would be made through a paper company registered in the Cayman Islands called China Airlines Asia (華亞航空), Wang said.

  Taiwan's other major international carrier EVA Airways (長榮航空) -- which has approved only US$50 million in total for investment in China compared to China Airlines' US$60 million -- was considering investing in the project, Wang said.

  EVA executives were unwilling to comment at length to the Taipei Times saying only that the company was "considering the possibility" of investing.

  A local Chinese-language economic daily yesterday speculated that two other Taiwan carriers, Far East Air Transport Corp (遠東航空) and TransAsia Airways (復興航空), have also shown interest in the Chinese air carrier.

  Wang said the proposal will be put before the general shareholders meeting for approval on June 1. If it gets the nod, then China Airlines will submit the plan to the government, said Wang who was confident it would be approved and work could begin on the terminal sometime this year.

  Chen Ding, assistant general manager of Xiamen International Airport Group Co Ltd (廈門國際航空港集團), which manages the airport, was also confident work could begin soon on the project but said some political hurdles remain.

  "While we are confident the deal will go through, it is politically sensitive and must be approved by governments on both sides of the Taiwan Strait," Chen said.

  Considering the Chinese government has already approved the purchase by China Airlines of the stake in China Cargo and Taiwan's government is readying to ease the ban on direct links, the deal looks certain to go ahead.

  Xiamen's Gaoqi International Airport opened in 1996, hosts 22 airlines, serves 52 domestic and international destinations such as Singapore, Penang, Kuala Lumpur, Manila and Jakarta, with more than 380 flights from Xiamen per week.
• Most Popular

  • 1

    Jeers as Real Madrid fall 2-1 to Man City

  • 2

    US bolstering first island chain deterrence: NSB report

  • 3

    Taiwanese tourists go viral in video during Japan quake

  • 4

    Taiwan, Poland to codevelop drones

  • 5

    Climber to attempt free solo of 101