(Yicai Global) Aug. 21 -- The cargo company under Air China has started its mixed ownership reform and plans to introduce new investors by selling more than 31 percent of its equity, according to a public bidding document from the Beijing Equity Exchange.

China National Aviation Holding Corp. removed its subsidiary Air China Cargo from its listed Air China arm and initiated the mixed-ownership reform in 2018. The investment introduction this time will further accelerate this restructuring.

At present, the three major Chinese aviation central enterprises’ mixed-reform pilots have all prioritized cargo. One main reason is air cargo’s weak profitability is gradually marginalizing it, while the logistics sector has grown swiftly in recent years. Though booming during the Covid-19 pandemic, international air cargo has flattened as the production of medical equipment has normalized in various countries. Also, the proportion of freight revenue does not exceed 10 percent of major airlines’ business, civil aviation industry insider Lin Zhijie told Yicai Global.

Air China Cargo formed in November 2003 with CNY7.4 billion (USD1.1 billion), in registered capital, according to its listing information in the Beijing Equity Exchange. The company mainly provides international scheduled and irregular air cargo, mail transport and aircraft maintenance services in the Chinese mainland, Hong Kong and Macau.

Air China Cargo’s assets totaled CNY15.7 billion as of July 31 this year. Its revenue was CNY10.5 billion and net profit was about CNY1.9 billion in the first seven months.

Air China Cargo’s controlling shareholder is China Aviation Capital Group Holdings, which has 65.22 percent of its shares. Cathay Pacific China Cargo Holdings has 17.74 percent stake and Starry Best owns the remaining 17.04 percent.

Editor: Ben Armour