Air China plans to sell cargo stake, H1 profit rises

Air China said it would sell a 51% stake in Air China Cargo to a sister unit for 2.44b yuan to focus more on its passenger unit, as it reported a 4.3% rise in H1 profit. China's flag carrier said Thursday that while Air China Cargo's profitability had improved, intensifying competition, exchange rate fluctuations and the complicated international trade situation had created many uncertainties. "Therefore the sale of Air China Cargo is the company's strategic and rational response to the air cargo market's uncertainties, to strengthen the stability of the company's operations," it said. After the sale to the unit Capital Holding, which it said was fully-owned by Air China's controlling shareholder China National Aviation Holding Company, Air China will put more of its resources into its passenger aviation business to improve its competitiveness, it added. Air China Cargo's other shareholders, including Hong Kong's Cathay Pacific Airways, have priority to purchase the stake or sell their shares with Air China, but the companies have yet to waive or exercise those rights, the company said, adding the deal still had be approved by shareholders. The deal comes as Beijing has been implementing mixed-ownership reforms aimed at bringing private sector money into government-run companies in an effort to revamp the country's bloated and debt-ridden state sector.<br/>