FRANKFURT, June 5 (Reuters) - The owners of Jade Cargo, Lufthansa Cargo’s joint venture in China, have decided to wind down the company after talks to restructure the loss-making air freight carrier failed.
“Due to the ongoing weak demand for air cargo services to and from China, the restructuring of Jade Cargo could not be successfully concluded,” Jade said.
Jade Cargo, whose operations have been grounded since January as its owners held talks on financing, announced at the end of February that Chinese transportation group UniTop had agreed to come on board as a partner.
Lufthansa Cargo said in March it planned to sell its 25 percent stake in Jade, having taken a loss of almost 16 million euros ($20 million) from the joint venture in 2011 as price wars plagued the Asia market.
A spokesman for Lufthansa Cargo, which owns 25 percent of Jade Cargo, declined to provide further details on Tuesday. The other owners of Jade Cargo are Shenzhen Airlines with 51 percent, and German state-owned development bank KfW’s DEG unit with 24 percent.
An industry source said the shut-down of Jade Cargo will not have any effect on Lufthansa Cargo’s operations as the Chinese company’s planes have been grounded for months already, and will likely not cause any major financial burden.
$1 = 0.8023 euros Reporting by Maria Sheahan; Editing by Bernard Orr