The Civil Aviation Administration of China (CAAC) denied reports that its deputy head had said three State-owned airlines will merge their cargo business to create Asia's largest freight transport company.
The Xinhua News Agency reported on Wednesday that the merger of the cargo businesses of Beijing--based Air China, Shanghai-based China Eastern Airlines and Guangzhou-based China Southern Airlines is under discussion, citing Zhou Laizhen, a deputy director of the CAAC.
However, "Zhou did not accept any interviews yesterday, and I do not know who the source is," Zhong Ning, a spokeswoman for the CAAC, told the Global Times via telephone on Thursday.
Zhong said the merger news should be announced by the State-owned Assets Supervision and Administration Commission (SASAC), as it is in charge of the merger of the three State-owned enterprises.
The government has recommended the merger of the cargo business of the three airlines as early as 2009, but the plan was delayed as the carriers were busy expanding their respective cargo businesses, media reported.
The SASAC, which is under the State Council, or the cabinet, could not be reached for comment on the report by press time.
Air China Cargo is a joint venture between Air China Limited and Cathay Pacific Airways Limited. With a registered capital of 3.24 billion yuan ($52.19 million), the company owned three Boeing 747-400 cargo freights as of January 2015, and had ordered eight Boeing 777 cargo planes.
China Cargo Airlines is a venture between China Eastern Airlines and China Ocean Shipping Company. China Southern Cargo is a unit of China Southern Airlines with six Boeing 777-200 and two Boeing 747-400 cargo planes, and it will introduce another six B777-200s by the end of 2015.
However, even after the merger, the new entity will face stiff competition from express companies in China such as SF Express and YTO Express which have strong capacity in the cargo business. SF Express had 18 cargo planes by the end of 2014.
