Deutsche Post AG (DPW.XE) said on Wednesday that its logistics division DHL Express has signed a new 15-year commercial agreement with Air Hong Kong in a move to support DHL's continued growth in the Asia Pacific region.
The German postal company said that, as part of the new deal, DHL will purchase eight A300-600F cargo planes from Air Hong Kong and lease them back to the carrier.
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Air Hong Kong is a joint venture between Cathay Pacific Airways Ltd. (0293.HK) and DHL. Under the new agreement, the Deutsche Post division will sell its 40% stake in the carrier to majority-owner Cathay Pacific, the company said.
The new commercial arrangement is a continuation of DHL's ongoing collaboration with Air Hong Kong, which started in 2002. However, Deutsche Post said it allows for greater flexibility in aircraft deployment and route selection, which will help consolidate DHL's position in the region and meet continually strong market demand.
"With Hong Kong's merchandise exports between January and September 2017 growing by 8.5% compared to last year, we're keenly aware of the upward momentum that the region's trade lanes are facing," DHL Express Asia Pacific's Chief Executive Ken Lee said.
Deutsche Post said the agreement will take effect on Jan. 1 2019.
Neither company disclosed financial details of the new arrangements.
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(END) Dow Jones Newswires
December 13, 2017 08:56 ET (13:56 GMT)