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China Southern-Air France cargo JV talks gain momentum
POSTED: 8:44 a.m. EDT, July 5,2007
Negotiations between China Southern Airlines and Air France-KLM have stepped up a notch after both agreed to hold talks over setting up a joint-venture cargo airline on the mainland.
A Xinhua report noted that much progress has been made since the vice general manager of China Southern, Xu Jiebo, announced in January last year that his company was seeking the co-operation of Air France-KLM and other Sky Team member airlines.
"China Southern surely hopes the foreign investor will hold the biggest possible share if the negotiations are successful," said Mr Xu.
Under existing law, overseas investors are permitted to hold 25 per cent equity interest in a Chinese carrier. Two foreign investors are allowed to hold no more than 49 per cent.
Analysts maintain that China Southern would prefer to attract European or US airlines as investors as such an outcome would boost sales in these key markets on routes to and from China amid stiff competition from both at home and abroad.
A joint statement from China Southern and Air France-KLM said that the airlines have already co-operated in passenger and cargo services, connecting major hubs in Europe and China.
China Southern has 300 passenger and cargo aircraft and operates on more than 600 domestic and international routes. In 2006, the airline carried 49.21 million passengers, ranking it among the world's top 10, according to the company web site. |
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