Air China and Hong Kong’s Cathay Pacific Airways will jointly set up China’s biggest cargo joint venture in Shanghai in early 2010 as the two carriers aim to tap the surging cargo volumes out of Shanghai Pudong. Air China will hold 51 per cent and Cathay Pacific will hold the remainder in the joint venture which will see the two carriers contributing 10 B747-400 freighters.

“The venture is expected to be launched ahead of the 2010 Shanghai World Expo but still requires regulatory approval,” Kong Dong, chairman of Beijing-based Air China said recently.

“We are confident that the JV will benefit from Shanghai’s growing cargo demand. The city handled three million tonnes of cargo last year, exceeding Hong Kong to become the biggest cargo market in China,” Kong said, adding that Air China hopes to learn from the Cathay Pacific’s international experience in the air cargo business via the venture.

In August Air China agreed to raise its stake in Cathay Pacific to 29.99 per cent from 17.49 per cent.