Singapore Air aims for lifting of U.S. sanctions

SINGAPORE, Aug 21 (Reuters) Singapore Airlines , whose new Chinese air cargo joint venture was unexpectedly hit by U.S. trade sanctions last week, said on Monday that it is working towards resolving the issue quickly.

Great Wall Airlines, in which Singapore Air and state-owned Temasek Holdings [TEM.UL] own 49 percent, over the weekend suspended all its flights after the U.S. Office of Foreign Assets Control imposed sanctions on the parent company, China Great Wall Industry Corporation.

''We're hoping for a speedy resolution to this issue,'' a Singapore Air spokesman said.

A spokesman for Temasek, which owns 57 percent of Singapore Air, said it had been briefed on the situation.

Great Wall Airlines flies between Shanghai and Amsterdam, via Seoul, and between Shanghai and Chennai, via Mumbai.

Singapore Air, the world's second-biggest airline by stock market value, had announced the 250 million yuan ( million) investment in May 2005, a move intended to give it a foothold in the air cargo market of Asia's second-largest economy. It owns 25 percent of Great Wall Airlines, while Temasek holds 24 percent.

China Great Wall Industry, which owns 51 percent of the cargo airline, provides international commercial launch services.

Its name is included on a list of companies and individuals that according to the U.S. Department of Treasury are owned or controlled by, or acting for or on behalf of, countries targeted for economic sanctions.

Great Wall said in a statement that cargo booked on its two Boeing 747-400 freighters has been moved to other air cargo carriers.

It also said that it was in talks with the United States over ''bridging the impasse created by these sanctions, which have nothing to do with the operations of GWL''.

Singapore Air shares ended Monday's session 0.75 percent higher at S.50, outperforming a 0.65 percent decline in the broader market <.sti>.

REUTERS SRS HS1712