Sign of the times ...recommends industry activists to review this abridged/highlighted clip from Bloomberg ...it is a sharp fact laden article discussing Cathay/ Swire Pacific's sale of Hong Kong Air Cargo Terminals Ltd (Posted 28 May,2010)
In case you missed this week's announcement of the strategic re-alignment of air cargo infrastructure interests in Hong Kong...read on.....
There has been some FRONT PAGE media speculation on mainland China cargo air carrier consolidation. This is not consistent with information gathered by AFA delegation members during the CAAC Planning Forum in BEIJING. Incidentally an early heads up; AFA plan to do a similar delegation tour to Shanghai in mid October, to visit leading aviation facilities and receive briefings. An extra day can be added for those wanting to see the WORLD EXPO in cool weather with calm crowds.Please register your interest early as with the BEIJING TRIP we will only have 16 spaces.
Finally CONGRATULATIONS to all at Dragonair for winning the prestigious Skytrax "best regional airline in the world award". This award voted on by over 18 million passengers from 100+ nations is a truly top level achievement....the back page SCMP piece comments light heartedly on this achievement BUT at least recognises that if you want something difficult done well, leave it to the flyboys not the politicos..Ash clouds come to mind..I could go on.
We look forward to hosting James Tong, Dragonair as a speaker at an AFA industry leader lunch after our summer recess.
Swire, Cathay Sell Hong Kong Cargo Handler Stakes Bloomberg 25 May,2010
by Wendy Leung
Swire Pacific Ltd. and affiliate Cathay Pacific Airways Ltd. agreed to sell their stakes in Hong Kong Air Cargo Terminals Ltd., the city’s largest air-freight handler, as the airline works on building its own facility.
Hactl’s other existing shareholders including Jardine Matheson Group and Hutchison Whampoa Ltd. will pay HK$2.56 billion ($330 million) for Swire, Cathay and Citic Pacific Ltd.’s holdings, according to a stock exchange statement today. The three sellers own a combined 40 percent of the venture.
Cathay expects to open its HK$5.5 billion cargo terminal at Hong Kong airport, the world’s second busiest for freight, in 2013 after delaying work during last year’s global recession. The carrier pledged to sell the Hactl stake when it won the right to build the new terminal in March 2008.
“The new cargo terminal represents a significant investment in Hong Kong,” Swire Pacific and Cathay Pacific Chairman Christopher Pratt said an in e-mailed statement today. It’s “a clear commitment to continuing to develop the city as one of the world’s most important international air-freight hubs.”
Swire will sell its entire 20 percent stake in Hactl for HK$1.3 billion, according to the filing. It will make a profit of about HK$826 million. Cathay and Citic will both sell stakes of about 10 percent for around HK$640 million. Cathay expects a HK$329 million profit, while Citic will likely have a profit of HK$413 million.
The purchasers also include Wharf (Holdings) Ltd. and China National Aviation Corp. (Group) Ltd., which is an affiliate of Air China Ltd. Hutchison will buy stakes through its container- terminal arm and via an investment unit.
The buyers will increase their Hactl stakes “on a pro rata basis,” the venture said in an e-mailed statement. Jardine Pacific Ltd. is the largest Hactl shareholder with a 25 percent stake, according to the venture’s website. Wharf and Hutchison both own 12.5 percent and China National Aviation holds 10 percent.
Swire fell 2.8 percent to HK$84.00 in Hong Kong trading. Cathay dropped 3.5 percent to HK$14.50. Hutchison lost 3.7 percent to HK$47.30. The benchmark Hang Seng Index tumbled 3.5 percent.
Cathay, 42 percent owned by Swire, wants its own facility to cut handling costs as increasing competition from Singapore Airlines Ltd., FedEx Corp. and other air-cargo carriers crimps margins. The airline has also agreed to buy a stake in Air China’s cargo unit and ordered new Boeing Co. freighters to boost is freight operations.
The carrier expects “strong” results in the first half and through the rest of the year because of improving cargo and premium-passenger sales, it said on May 10. Air China owns 30 percent of Cathay.
Cargo volume at Hong Kong airport jumped 38 percent from a year earlier in April as the economic rebound revives trade. Worldwide international air-cargo traffic grew 28 percent in March, according to the International Air Transport Association.
Footnote: AFA provides the above info/INSIGHT pieces several times a week as a courtesy to AFA members and associates... the items selected are chosen only from the most influential sources and provided on a "in case you missed this" easy to access basis. The stories are abridged to focus primarily on ASIA/PACIFIC area issues and are chosen to highlight significant trends. We are not attempting to duplicate the many breaking news or search services provided by specialist publications. AFA info/INSIGHT aims to distill the best public commentary for use in its internal industry debates and external industry advocacy. As with all AFA activities this service is not intended to promote any one product or service but rather a greater appreciation of civil aviations challenging role as the REAL World Wide Web.
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