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Korean Air Lines Co. may form a venture with China's Okay Airways to deliver cargo.
Korean Air Lines Co., the world's second-largest airfreight carrier, may form a venture with China's Okay Airways Co. to deliver cargo in and out of Asia's second-largest economy.
"At the moment, we are in talks with Okay Airways," Lee Hyoung Woo, a spokesman for Seoul-based Korean Air, said, confirming a report in the Korea Economic Daily. "Nothing has yet been decided."
Korean Air is focusing its resources in China as it aims to become the world's biggest air cargo carrier by 2007. Korean Air is carrying more cell phones, flat screen monitors and other products made from China and other Asian countries to the U.S. and Europe. Revenue from airfreight operations accounted for 31 percent of the airline's total sales in the first quarter.
A venture between Korean Air and Okay Airways may be the third such tie-up in the China after Lufthansa AG's cargo unit and Singapore Airlines Cargo Pte.
Lufthansa AG's cargo unit, the world's biggest airfreight carrier, in October last year set up a venture with Shenzhen Airlines Co., becoming the first cargo airline tie-up in China with an overseas carrier. Jade Cargo International is 51 percent owned by Shenzhen Airlines and 25 percent owned by Lufthansa.
Singapore Airlines Cargo, the world's third-largest airfreight carrier, said in May it will form a cargo carrier in China with Temasek Holdings Pte and China Great Wall Industry Corp. in China.
Singapore Airlines Cargo, a unit of Asia's most profitable carrier, will own 25 percent of the new airline. State-owned China Great Wall Industry will hold 51 percent and Dahlia Investments Pte, a wholly owned subsidiary of the Singapore government's investment arm Temasek, will own 24 percent.
Okay Airways, China's first private airline based in Beijing, started flying in March last year.
Shares of Korean Air rose as much as 2.8 percent to 18,200 won and traded at 18,100 won as of 9:51 a.m. in Seoul.
(CRIENGLISH.com via Bloomberg June 23, 2005)
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