The Japanese Government is 'investigating' if the recently announced ownership changes in Hong Kong's airlines contravene the terms of a bilateral agreement requiring the territory's carriers to be British-owned and controlled.
The Ministry of Transport's officer for air talks in the Civil Aviation Bureau, Shinsuke Endoh, said the government was studying the tentative agreement announced by Swire Pacific, Cathay Pacific Airways, Citic Pacific and China National Aviation Corp (CNAC) on April 29.
The deal will see CNAC buying a $1.97 billion, 35.86 per cent stake in Hong Kong Dragon Airlines (Dragonair), from Citic, Swire and Cathay, increasing mainland Chinese ownership in the regional carrier to 64.36 per cent.
It would be kept at an even 60 per cent once Dragonair is floated on the stock exchange.
At the same time, $6.3 billion worth of new shares in Cathay would be issued to Citic, increasing Citic's ownership in the de facto flag carrier to 25 per cent from 10 per cent and reducing Swire's to 43.9 per cent from 52.6.
A number of Hong Kong's air services agreements require the territory's airlines to be 'substantially owned and controlled' by British passport holders up to next year's takeover by China.
Mr Endoh said: 'We are very interested in the ownership changes of Hong Kong's airlines, which should be substantially controlled by the UK.
