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The carrier credited Beijing's "policy of spurring domestic demand and related measures taken by the industry to fight the financial crisis." It raised capacity 21.2% to 27.92 billion ASKs and saw traffic rise 18.7% to 21.23 billion RPKs. Domestic passenger numbers grew 18.2% to 15.8 million but groupwide load factor dropped 1.6 points to 75.7%.

Air China picks up 12.5% Cathay stake, Swire takes extra 2%
By David Kaminski-Morrow

Cathay Pacific Airways shareholder CITIC Pacific is selling a 12.5% stake in the carrier to Air China.

It will also sell a 2% share to major Cathay Pacific stakeholder Swire Group. CITIC Pacific says the decision is in line with plans to focus on its main businesses.

Air China's Cathay stake will be acquired under a transaction worth HK$6.335 billion ($817 million).

This will take taking Air China's holding in the Hong Kong-based airline to just under 30% from its current level of 17.49%.

Swire Group's acquisition is worth HK$1.013 billion and takes its shareholding to nearly 42% from just under 40% previously.

The two agreements represent the same price, HK$12.88, per share in Cathay Pacific.

Air China and Cathay Pacific describe the changes as a "realignment" of the carriers' respective interests.

"This increase in shareholding will be useful in terms of boosting the international competitive strengths and brand value of Air China," says Air China, which says the agreement will "serve as a platform for further co-operation".

Cathay Pacific adds that it is looking to "leverage the opportunities" that will emerge from the "strengthening of the ties" between the airlines.

Swire Group says its increased shareholding demonstrates "full support" for Cathay Pacific. It adds that it "welcomes" the increased share of Air China

Air China and Cathay to set up cargo JV by end-2009
By Greg Waldron

Air China and Hong Kong's Cathay Pacific hope to conclude a cargo joint venture deal by the end of the year.

The two carriers first announced plans for the JV in 2006. An Air China spokeswoman says the deal "should have been done earlier", but adds that the carriers are targeting the end of this year to conclude a deal.

The joint venture's routes and fleet composition are under discussion by a working group, she says. It will probably be based in Shanghai and fly both domestic and international routes. It is also likely to be 51% owned by Air China, she adds.

A report in Hong Kong's South China Morning Post says the two parties accelerated talks due to the planned merger of Shanghai-based carriers China Eastern and Shanghai Airlines. The spokeswoman denies that talks have been accelerated because of the planned merger.

"Both sides agreed to have a cargo joint venture in 2006, so you could say we already missed the target," says the spokeswoman.

She attributes the delay to Dragonair becoming a wholly owned subsidiary of Cathay Pacific in 2006, resulting in "internal restrictions" that affected negotiations about the cargo joint venture.

Air China owns just under 30% in Cathay Pacific. Earlier this month, it bought a 12.5% stake in the Hong Kong carrier from CITIC Pacific in a transaction worth HK$6.335 billion ($817 million).

At the time of Air China's stake increase, Cathay Pacific described the changes as a "realignment" of the carriers' respective interest.

"This increase in shareholding will be useful in terms of boosting the international competitive strengths and brand value of Air China," said Air China, adding that the agreement would "serve as a platform for further co-operation".

Cathay Pacific said that it is looking to "leverage the opportunities" that would emerge from the "strengthening of the ties" between the airlines.

Leur collaboration se renforce de jour en jour. Air China a annoncé le 27 août qu’elle et Cathay Pacific envisageaient de lancer un joint-venture cargo dès cette année. Les discussions sont bien avancées mais pas closes : aucun calendrier n’a donc été présenté.

Les négociations encore en cours portent sur le développement à long terme de ce nouveau rapprochement entre les compagnies chinoise et hongkongaise. Si aucune précision n’a été apportée, le joint-venture devrait être basé à Shanghai.

Un tel projet avait déjà été envisagé en 2006 mais avait été abandonné. C’est à cette date que les deux compagnies avaient acquis des participations croisées dans le capital de chacune.

Air China vient de faire passer la sienne dans Cathay de 17,46% à 29,99% la semaine dernière, en acquerrant une partie des actions de Citic Pacific. Elle a à présent atteint sa participation maximale contractuelle dans sa partenaire de Hong-Kong et doit obtenir l’accord de l’actionnaire principal de Cathay, Swire, pour l’augmenter davantage.