Air China to sell entire cargo operation

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Air China is about to join the ranks of passenger airlines that have abandoned cargo operations to operate only belly freight.

The airline is selling its cargo business for $354 million US, despite having improved its profitability. The airline blamed too much competition and the complication of tariffs with a hostile trade environment.

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Air China is a state-owned operation so the Chinese Government would have sanctioned the sale, which is in effect a wooden dollar transaction. Air China Cargo and the buyer, Capitol Holding, are both owned by the government’s China National Aviation Holding company.

The Air China Cargo operation is part owned by Cathay Pacific and legally, had the right to buy the shares from CNAH, but has seemingly chosen not to, having enough of its own troubles to deal with, never mind the addition of more aircraft and bases.

The government will not be happy it couldn’t find an external buyer, as its been trying to dump businesses it considers risky or best served in private hands.

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