CITIC Pacific plans to sell its 25 percent interest in a mainland air cargo joint venture to Air China, clearing the way for Cathay Pacific to buy a stake.

"We are talking with Air China and intend to sell the whole stake," managing director Henry Fan Hung Ling said after the annual general meeting.

The joint venture, in which Air China holds a 51 percent stake and Beijing Capital International Airport owns 24 percent, handles all of the carrier's international and domestic cargo and related ground service business.

The total freight handled by the venture increased 15 percent to 817,178 tonnes last year compared with 2005. But it recorded a HK$1 million loss compared with a HK$44 million profit in 2005.

Fan said the stake sale is intended to clear the way for Cathay Pacific to invest in the venture after Air China sold its indirectly held 43.29 percent stake in Dragonair to Cathay Pacific for HK$430 million in cash and 289 million shares in Cathay Pacific in September 2006, giving the mainland carrier a 10.16 percent strategic stake.

CITIC Pacific paid 550 million yuan (HK$559.1 million) for its 25 percent stake in 2003.