Taiwan OKs airline's mainland investment
(AP)
Updated: 2005-11-24 15:52

The island's largest carrier, China Airlines Ltd., said on Thursday it was waiting for a response from Beijing after the island's authority approved the company's investment in a cargo airline in the Chinese mainland.

China Airlines will pay US$40 million (euro34 million) for 25 percent of Yangtze River Express Airlines Co., a wholly owned unit of the mainland's Hainan Airlines Co., the island's Investment Commission said in a statement on Wednesday.

Even though direct transportation links between Taiwan and the mainland ended in 1949 when the two sides split at the end of a civil war, The island's airlines have been aiming to expand their cargo operations in the mainland's market, as the island's air cargo volume is shrinking.

The commission said that the island's two shipping companies, Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd., would also be allowed to invest in the mainland's company.

Yang Ming Marine, Taiwan's second-largest shipping company by fleet size, will pay US$19.2 million (euro16.2 million) for its stake, while Wan Hai will pay US$9.6 million (euro8.1 million), the commission said.

Yang Ming Marine said earlier it planned to take a 12 percent stake in Yangtze River Express, while Wan Hai said it planned to buy a 6 percent stake.

Local media reported in September that Yang Ming Marine, Wan Hai Lines and Luxembourg's Cargolux Airlines International SA planned to jointly buy a stake of 49 percent in the mainland's company. Cargolux later pulled out of the deal.

China Airlines is now waiting for the Beijing authorities to approve the deal, company spokesman Johnson Sun said.