CAL to buy 25% of China Cargo

CAL to buy 25% of China Cargo

TAIPEI (AFP): Taiwan's China Airlines (CAL) is expected to buy a 25 percent stake in Shanghai-based China Cargo Airlines in September at the earliest, CAL officials said Friday.

"Our target is to finalize the acquisition before the end of this year, but we don't rule out the possibility of closing the deal as early as September," said a CAL official who declined to be named.

"With the acquisition, we hope to turn Taiwan into an air cargo hub for China and the rest of the world once the island opens full direct links with Beijing," he said.

The US$64-million deal with China Eastern Airlines, the largest shareholder of China Cargo Airlines, will have to be approved by both Chinese and Taiwanese authorities before it can go ahead.

China Cargo Airlines currently operates 12 international routes between China and major countries and areas including the United States, Europe, Japan and Hong Kong.

CAL has recently joined two other Taiwanese airlines, EVA Airways and Far Eastern Air Transport Corp, and Taiwan Airport Service Co. to form a 221.45 million yuan ($27 million) cargo terminal joint venture with Xiamen city in southern China.