China Eastern Airlines (MU, Shanghai Hongqiao) has announced it has completed its divestiture from its wholly-owned freight subsidiary, Eastern Air Logistics, following the sale of its 100% shareholding to Eastern Airlines Industry Investment, a wholly-owned subsidiary of CEA Holding.

The carrier said in a disclosure to the Hong Kong Stock Exchange that the transfer, valued at CNY2.433 billion (USD353 million), was completed on February 8, 2017.

Aside from interests in warehousing, international sea/air/land cargo transport agency, cargo loading & unloading, property management, and retail, Eastern Air Logistics also owns an 83% stake in China Cargo Airlines (CK, Shanghai Hongqiao).

China Eastern said last year that Eastern Air Logistics no longer remained a viable investment given its shrinking market share. China Cargo Airlines was singled out in particular for the heavy debts it had incurred over the period 2011-15.

"After Completion of the Disposal, the Company will focus on the air passenger transportation business, further foster its reform and transformation, improve the operating and management ability of the Company in respect of air passenger transportation business, and strive to create better investment returns for shareholders," it said.

Insofar as its cargo requirements are concerned, China Eastern signed a ‘Bellyhold Space Management Agreement’ with China Cargo Airlines in November of last year. Under the deal, China Eastern has entrusted China Cargo Airlines with its bellyhold cargo sales as well as the oversight of all relevant freight operational support on all of its passenger flights (operated by China Eastern and its various subsidiaries).