Landmark China-US deal opens up air cargo market –
The level of air cargo moved between China and the USA will dramatically increase following a new flight accord between the two countries. The agreement will not only bring about a more than fivefold increase in the number of flights presently allowed but it will double the number of US airlines able to serve China. It will also allow US cargo airlines to establish hubs in the country and operate with a high degree of operational freedom.
It is estimated that $60 billion worth of goods will be exported by air to the USA this year, with a similar amount being imported. The deal, which applies to both passenger and freight services, will allow an additional 195 weekly flights by airlines from both countries, 111 by all cargo carriers and 84 by passenger airlines. One new US all cargo carrier will be allowed to start operations later this year, with further additional airlines being permitted at intervals up to 2010. Carriers will be allowed to fly in to any city, a further liberalization of existing regulations.
The agreement will be of major benefit to FedEx and UPS, both of which have already significantly developed their operations in the region. An example of the market potential which these carriers see in China is a new £500m (€750m) production plant which high tech manufacturer Hitachi is building at Shenzhen, China. The new disk drive manufacturing facility, employing some 7,000 people, is expected to start production of 3.5″ disk drives in Q4 2005. The company believes that Shenzhen’s close proximity to Hong Kong will make it an ideal location from which to serve its global customers.
