Air China has signed a strategic co-operation framework agreement with Sinotrans Shipping, one of China’s largest shipping companies.

The airline said that its subsidiary, Air China Cargo, and Sinotrans will work together on product design and development, co-ordination on logistical issues and further explore the possibility of joint investment in infrastructure construction and expansion in overseas markets.

Air China said it may consider establishing closer equity ties with Sinotrans’ Shanghai-listed unit, Sinotrans Air Transportation Development.

Meanwhile Sinotrans Shipping is set to almost double the size of its fleet by 2011. Company chairman Zhao Huxiang said ship prices have fallen by up to 60 per cent on their peak last year, which provides a good opportunity to purchase new vessels.