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BEIJING (AFX) - China's two largest cargo airlines - Air China Cargo Co and China Cargo Airlines Ltd - are set to merge before the end of September, with Hong Kong Dragon Airlines to join them later this year, the Economic Observer reported.
The newspaper quoted unidentified sources as saying that the move is aimed at forming a new entity with the potential to become a top five global cargo airline.
Currently around two thirds of the country's air cargo volume is handled by foreign carriers, said the report.
The new carrier, which will be formed on consolidation of the three airlines, will be based in Shanghai, the report added.
It is not yet known what Dragonair plans to do with its passenger business, according to the report.
Air China Cargo's shareholders are Air China, CITIC Pacific Ltd and China Capital Airport Holding Co, which hold 51 pct, 25 pct and 24 pct stakes, respectively.
China Cargo Airlines were established in 1998 by China Eastern and China Ocean Shipping (Group) Co (COSCO Group), with China Eastern holding a 70 pct stake and China Ocean Shipping holding the remaining 30 pct.
Air China subsidiary China National Aviation Co Ltd is Dragonair's biggest shareholder, with a 43.29 pct stake.