Cathay, Air China set up cargo airline

	Air China chairman, Kong Dong, and Cathay Pacific chairman, Chris Pratt, shake hands in Beijing after signing the joint venture cargo deal between the two carriers

Under the agreement, which is subject to approval from the relevant authorities, Air China will hold 51% of the cargo airline while Cathay Pacific will acquire 25% direct equity in ACC as well as funding an offshore trust – in the form of a loan - to hold an additional 24% economic interest in ACC, a company statement said.

Cathay will invest 1.67 billion yuan (US$245.16 million) into the joint venture and sell four freighters and two spare engines to ACC. ACC was launched seven years ago and is now China’s largest all-cargo airline operating with a fleet of seven B747 freighters.

“The joint venture airline will provide the two most important cargo-generating regions in the Mainland with two highly competitive and efficient home-based carriers – Cathay Pacific in the Pearl River Delta and ACC in the Yangtze River Delta,” said Cathay Pacific chairman, Christopher Pratt.