SIA to buy 16% of China cargo carrier for $49.3 m

SINGAPORE: Singapore Airlines said on Monday that it will take a 16 per cent stake in China Cargo Airlines for 328 million Yuan ($49.3 million).

China Cargo Airlines, which is based in Shanghai, is currently 70 per cent owned by China Eastern Airlines and 30 per cent by COSCO.

The agreement is subject to regulatory and other approvals. In a filing to the Singapore Exchange, SIA Cargo said that following the investment agreement signed in Shanghai, the parties will seek approvals for China Cargo Airlines to be re-organized into a limited liability Chinese-foreign equity joint venture company.

The registered capital will increase to RMB3 billion.

SIA Cargo’s investment in the re-organized company will amount to RMB328 million.

Following necessary approval, China Eastern Airlines will hold a 51 per cent stake, COSCO 17 per cent, SIA Cargo and Concord Pacific 16 per cent each.

SIA hikes fuel surcharge

Singapore Airlines is increasing its fuel surcharge for tickets issued on or after 2 December 2010 as a result of a sustained escalation in the price of jet fuel in recent months.

The price of jet fuel is now above USD95 per barrel.

The increase in the fuel surcharge is the first since June 2008. The last three revisions were to reduce fuel surcharges, in September 2008, November 2008 and February 2009.

The new levels will apply to Singapore Airlines and SilkAir flights. They represent an increase of between US$3 and US$25 per sector, depending on the distance and class of travel.

For flights serving Colombo the new fuel surcharge is US$ 91 for business class tickets and US$ 80 on economy class.