The decision to invest in Hangzhou's Xiaoshan International Airport should enhance Airport Authority Hong Kong's (AA) financial attractiveness in the run-up to its proposed privatisation.
A senior Zhejiang official told reporters in Hong Kong yesterday that a commitment by the AA to buy more than 30 per cent of the mainland airport would be signed on Monday during the opening ceremony of Zhejiang Week.
The deal would help the Hong Kong airport operator tap into the fast-growing market for air freight and travel in the Yangtze River Delta, and boost its growth potential for investors as the authority prepared for a listing on the stock exchange, industry consultants said.
'I don't see any special synergies between Hangzhou and Chek Lap Kok,' said a British-based aviation consultant who works with several mainland airlines and airports. 'But I do see it as a possible investment opportunity for Hong Kong - the AA has, as we all know, been looking for opportunities to invest in mainland airports as a way of ensuring that it benefits from their rapid growth.'
Zhong Shan, the vice-governor of Zhejiang province, said the agreement would cover strategic co-operation between the two airports, as well as Hong Kong's intent to invest in Xiaoshan airport.
'It is a strategic co-operation between the two airports. AA will invest in Xiaoshan and it will take a stake of more than 30 per cent,' he said, declining to give more details. The two sides will unveil the deal on Monday.
