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CAL Says Bid for China Airline Stake Could Be Delayed
Plans by Taiwan's China Airlines (CAL) to acquire a stake in a Chinese cargo-only airliner could be delayed by management changes at CAL, the company said Monday.
CAL spokesman Scott Shih said the Taiwanese airline planned to buy a stake in the Shanghai-based China Cargo Airlines for a slice of the lucrative and growing air cargo business.
But any deal could be delayed as CAL had recently changed its chairman and president who could review the investment despite CAL's management having authorised an investment of up to US$60 million each year in China, he said.
"Negotiations are underway but no agreement has been arrived at."
However, Shih said he could not confirm a report in the Asian Wall Street Journal on Monday citing an official from China Eastern Airlines, -- the largest shareholder of China Cargo -- as saying that CAL might take a 25 percent stake after the mainland all-cargo airline.
This would expand China Cargo's registered capital to 1.5 billion yuan (US$181.2 million) from 500 million yuan (US$60.24 million).
China Cargo services mainly long distance routes from Shanghai to cities in the United States, Japan, South Korea and France.
Analysts said the investment was part of CAL's plans to expand its cargo service internationally.
CAL earlier this month took delivery of a cargo airplane from Boeing Co., taking its total number of freighters to 13.
It was slated to receive another B747-400 cargo plane from the American manufacturer by the end of July and a third at the end of August.
The three jets were part of 17 cargo jumbos ordered in 1999. The remainder would be delivered to Taiwan before 2007, CAL said.
CAL also has 38 passenger jets.
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