Talks to merge the cargo operations of Air China , China Eastern and China Southern could put a cargo venture between Cathay Pacific and Air China at risk, a source familiar with the situation told the South China Morning Post.
One official from China Southern said a preparation team had been formed to work out details of the consolidation, while other unnamed sources said the proposed merged business would be based in Shanghai, according to the report.
Air China and China Southern officials were not immediately available for comment. A spokesman from China Eastern in Shanghai said he had not heard about the matter, and declined to comment further.
Another source told the newspaper a task force formed by State-owned Assets Supervision and Administration Commission (Sasac) officials and airline executives was working out the form and shareholding structure of the new cargo airline.
A Cathay spokeswoman said a preparation team for its cargo venture with Air China had been set up since March.
"Our target of having the joint venture carrier coming into operation this summer remains unchanged," the spokeswoman told Reuters. She gave no further comment.
Cathay had in February agreed to take a 49 percent stake in Air ChinaCargo and the venture is still subject to final approval by the central government.
The $474 million venture will allow Cathay and Air China to tap growth in China's Yangtze River Delta region, giving them a foothold in Shanghai, a major air hub in the country.
About 70 percent of the international air cargo in China is carried by foreign carriers including Air France , Lufthansa and Cargolux while the major three mainland carriers accounted for 30 percent, the South China Morning Post said. (Reuters)
