Ownership change at Yangtze River Express

Taiwan-based China Airlines (CAL) and two other Taiwanese transportation companies will sell their combined 43% share of Shanghai-based all-cargo carrier Yangtze River Express (YRE) back to majority owner Hainan Air Group.

YRE) was established in 2003 as a joint venture of Hainan Air Group (85%), Hainan Airlines (5%), and Shanghai Airport Group (10%). It took over the cargo operations of all of the carriers of the Hainan Air Group, including Hainan Airlines, China Xinhua Airlines, Chang’an Airlines, and Shanxi Airlines. In 2006 it sold 49% of it shareholdings to a Taiwanese group led by China Airlines (which took a 25% stake) and including Yang Ming Marine (12%), Wan Hai Lines (6%), and China Container Express lines (6%).

Reports in the Asian media give conflicting explanations regarding the reasons for the sale. Some sources indicate that Hainan initiated the process, others say CAL, Yang Ming, and Wan Hai are frustrated over the lackluster financial performance of their investment, while still others quote CAL as saying the recent availability of direct all-cargo cross-straits flights has eliminated the need to maintain a jv presence in China. And none of the reports mention the fate of the 6% held by China Container Express Lines. One thing most of the reports agree on is that the divestment will take place in stages over the next few years, with the price matching the original purchase price.

Yangtze River Express currently operates nine 737-300F/-300QCs in domestic service and three QCs (primarily for integrators DHL, FedEx, and UPS, as well as for Shenzhen-based SF Express), plus three 747-400 freighters (serving Europe and the US).