Air China is planning to sell its major stake to Capital Holding considering uncertainties in international trade.
Capital Holding will own 51% stake of the airlines after $ 357m transaction is complete.
The remaining 49% will be owned by Cathay pacific.
Capital Holding is a wholly-owned subsidiary of state-owned China National Aviation Holding Corporation (CNAHC), which is also a 53.5% shareholder of Air China.
Air China said: “Given the complex international trade situation and the expected weakening of Renminbi, the profitability has not been fundamentally improved. Due to the extended period of poor performance, there is still a large amount of losses to be covered.”
Air China gave two reasons for the selling of its freight-carrying subsidiary: “With the increase in the income of residents, the upgrade of consumption structure, and the increasingly close economic tie among regions, the air passenger transport business maintains stable growth while possessing huge market potential.
“Following the disposal of Air China Cargo, the Company will further concentrate its resources on the air passenger transport business to increase the competitiveness thereof while mitigating the impacts of intensified competition in the cargo transportation market and uncertainty of international trade situation on the Company’s business performance”.
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