The deal is done — Henan to buy 35% of Cargolux

Reports in the European media today indicate that the Grand Duchy of Luxembourg agreed to sell a 35% stake in all-cargo carrier Cargolux to Henan Civil Aviation Development & Investment Co (HNCA) for US$231 million. Full details are not available yet, but it appears the deal includes the following:

In addition to the above, at least one source reports that a commercial agreement signed earlier this month requires Cargolux to station not less than one third of its fleet at CGO.

There are many in the industry who see this as a bad deal for Cargolux, forcing it to operate from not one, but two, sub-optimal hubs — a deal forced on the carrier by EU law forbidding government ownership. But Zhengzhou is one of the most important centers of IT manufacturing in the world. It has a population of over 8 million, is the economic and political center of Henan province, and is a major transport hub for central China. So there is potential for success as well as failure. We shall see.

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