Citing "poor conditions of the air freight market", China Eastern Airlines has announced it will sell its 100% stake Eastern Logistics Group to Eastern Airlines Industry Investment Co., Ltd., which like the airline, is a wholly-owned subsidiary of government-owned China Eastern Air Holding.
In a statement to the stock exchange, the Shanghai-based carrier said Eastern Logistics had endeavored to change its business model in recent years but its share of the freight market has been
shrinking, and its prospects are unclear due to the "relatively low competitiveness and risk resistance."
It added that Eastern Logistics' subsidiary China Cargo Airlines also suffered "large losses" from 2011 to 2015.
Eastern Logistics, which is involved in the freight logistics business, wholly-owns Shanghai Eastern Transport and Eastern Express, while it also holds an 83% stake in China Cargo Airlines.
China Cargo Airline will take over all belly-hold cargo sales
The logistics company is based in Shanghai Pudong International and handles air freight consignments in the cargo facilities at Pudong and Hongqiao.
In order to avoid competition between its passenger aircraft belly-hold space business and China Cargo Airline’s all-cargo aircraft freight business, China Eastern Airlines said China Cargo Airline will handle all belly-hold cargo sales, settlement and relevant operational support on all of its passenger flights.
The sale of Eastern Logistics Group will have to be approved by shareholders in a meeting on January 17, 2017.
Nol van Fenema