Following the formation of an alliance with five other logistics companies in January, Shanghai Airlines took a further step toward strengthening its position in a city that commands 70% of the Chinese freight market through the injection of 260 million yuan (US$37.2 million) into its SAL Cargo International subsidiary.

Launched in 2006, SAL Cargo had registered capital of 124.1 million yuan, of which SAL invested 68.2 million yuan to hold a 55% stake while Sino Prime Ltd. and Juniper Estate held 25% and 20% respectively. EVA Air soon thereafter sealed a deal with Sino Prime to purchase its stake for US$3.9 million. SAL forged the logistics partnership four months ago and has a controlling stake.

Board Secretary Xu Junmin said the 260 million yuan is for fleet expansion, as its cargo subsidiary plans to introduce two MD-11s this year and add one more in 2009. SAL Cargo International's fleet currently consists of two 757 freighters, one 747F and four MD-11Fs.

Owing to "increasingly fierce competition caused by boosted cargo capacities in Shanghai," according to Xu, SAL Cargo International posted a net loss of 160 million yuan last year. He predicted the carrier will narrow its loss by a large margin in 2008.