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China Eastern Airlines yesterday declined to comment on CITIC Pacific's possible sale of its stake in Air China Cargo.

"Whether the two cargo carriers can be merged depends on how to solve the relationship between the shareholders," said Luo Zhuping, board secretary of China Eastern Airlines.

With average annual growth of 17 per cent over the past decade, China is one of the world's fastest growing air cargo markets. But due to intense competition and limited capacity, Chinese cargo carriers suffer from poor profitability.

Air China's cargo traffic experienced a year-on-year growth of 15 per cent in the first six months of 2006. Its cargo capacity also increased 14 per cent year-on-year. But the average cargo yield dropped 4 per cent compared to the same period last year.

(China Daily 11/22/2006 page11)

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