FOR IMMEDIATE RELEASE
4 August 1998
China Cargo Airlines -
A Joint Venture
Established by China Eastern Airlines and China Ocean Shipping
China Cargo Airlines ("Cargo Airlines"), a joint venture between China Eastern Airlines Corporation Limited ("CEA") and China Ocean Shipping ("COSCO"), was established on 30 July 1998. Cargo Airlines is China's first cargo airline company specializing in air freight business. The establishment of Cargo Airlines is part of CEA's plan to focus on the development of air freight business. At the same time, it is also the first attempt by CEA to forge an alliance between two major players in the transportation business, with COSCO being China's biggest ocean transport enterprise.
The registered capital of China Cargo Airlines is RMB 500 million, of which CEA contributed RMB 350 million and is a 70 per cent shareholder, and COSCO contributed RMB 150 million and is a 30 per cent shareholder. The principal scope of business of Cargo Airlines includes domestic and international air-freight and mail delivery, courier service for cargo and mail, sub-contracting aircraft for transportation of goods, agency services for air freight and mail delivery. Cargo Airlines intends to established its base at the Shanghai Pudong International Airport, which will support the development of its various businesses. Before moving to the Shanghai Pudong International Airport, Cargo Airlines will establish its provisional base at the Shanghai Hongqiao International Airport. During the initial stage, Cargo Airlines will mainly operate its air-freight business through leased aircraft.
As agreed by the parties, CEA will appoint 5 directors to the board of Cargo Airlines and COSCO will appoint 3 directors. Vice-chairman of the board and President of CEA, Mr. Li Zhongming, will act as Chairman and authorised representative of the Cargo Airlines, while the Vice-president and director of CEA, Mr. Zhong Xiong, will be the Vice-chairman and General Manager of the Cargo Airlines.
The purpose of this joint venture between CEA and COSCO in operating air freight business is to fully utilize the advantageous position enjoyed by both parties in the transportation business, targeting the rapid increase and market potential of the domestic and international air-freight business, and achieving the target of handling air and sea cargo to make it a comprehensive and internationally competitive company.
After the establishment of Cargo Airlines, it will build on the foundation of CEA's original air freight operation, absorb COSCO's experience in cargo transportation, utilize the original cargo transport network of CEA and COSCO, further develop the domestic and international market for air-freight and mail delivery. At the same time, Cargo Airlines will capitalize its own highly specialised characteristics and its location in Shanghai, being a financial metropolitan in the eastern part of China and having a high economic level and potential for development. Cargo Airlines will also acquire a competitive edge in the domestic and international air-freight business, opening up air-freight transportation, increasing economic efficiency, and fostering the economic growth of both CEA and COSCO.
| Issued by: | China Eastern Airlines Corporation Limited |
| Through: | Keith Statham Associates PR |
| Contact: | Philip Hui Tel: 2810 8108 Fax: 2868 4116 |
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