Air China said its board approved a plan to raise the company's holding in its air cargo unit to 76 percent by acquiring conglomerate Citic Pacific's 25 percent stake.

Air China spokeswoman Rao Xinyu said a wholly owned unit of the Chinese flag carrier will pay cash for the stake in Air China Cargo, but she said the exact terms of the deal haven't been reached.

Rao said there's no timetable for completion of the deal and there is not decision whether it will further increase holding in the airline.

Air China owns 51 percent of the joint-venture cargo carrier, which is China's biggest air cargo airline by capacity.

Air China Cargo operates about ten Boeing 747 freighters mainly on international routes. The cargo carrier also uses the bellies of Air China's international passenger aircraft to transport cargo.

Launched in 2003, the cargo airline is also 24 percent-owned by Beijing Capital Airports Holding, which operates Beijing's international airport.

Air China said it plans to purchase a 25 percent stake in Air China Cargo from Gold Leaf Enterprises Holdings.

Citic Pacific's Managing Director Henry Fan earlier said the conglomerate plans to gradually sell its noncore operations, including aviation assets such as its stake in Air China Cargo. In 2006, the company sold its stake in Hong Kong Dragon Airlines and also cut its holding in Cathay Pacific Airways.

Apart from its stake in Air China Cargo, Air China also has an agreement with Cathay Pacific to start a joint venture air cargo airline to be based in Shanghai.

Air China earlier said it expects the joint venture to begin operating by the end of this year.

Under the plan, Cathay Pacific would have a 49 percent interest in the airline and Air China 51 percent. Both airlines already have reciprocal 17.5 percent shareholdings in each other.

Mainland Chinese media reported last year that Air China's plan to increase its stake in Air China Cargo would facilitate a merger with China Cargo Airlines, run by China Eastern Airlines.

However, China Eastern chairman Li Fenghua said those merger talks with Air China ended without agreement after the Beijing-based airline announced its cargo joint venture with Cathay Pacific.