China EMS Flies Abroad to Vie for Share
China Postal Airlines, a carrier under the country's State Post Bureau, flied to Seoul, South Korean, from Beijing Capital Airport, the first international flight for the airline, which will bolster the competitiveness of China's state-owned express services provider in the overseas express markets.
Insiders said that China Postal Airlines aims at facilitating Express Mail Service (EMS)'s development and competence in competing with the ambitious global giants.
EMS is the express service arm of China Post, the postal services provider under the wing of SPB.
UPS, FedEx, DHL and TNT now possess an absolute monopoly over the express market in global market, meaning China Postal Airlines must scale up investment in fleet, routes and transport capacity so as to rival them.
As a matter of fact, EMS has taken countermeasures to cope with the overheated competition at home and abroad.
Last year, it started to offer overnight and trans-regional operations, which are just fulfilled by the night flights launched by China Postal Airlines.
SPB has planned to construct a center for express and logistics distribution in Lukou Airport in the southern city of Nanjing and marked out 33 routes to the center from cities like Beijing, Guangzhou, Xiamen, Wuhan, Xi'an and Chengdu.
China Postal Airlines will fly to more counties in Asia, Europe and America at a proper time in future in accordance with aviation freedoms and the amount of international mails and parcels.
Profits for international express business are much fatter than that for domestic operations, while EMS has much gap with the global Big Four in the aspects of capital, operating experience, services and route networks. Therefore, it has idled out of the huge market for a long time.
EMS mainly operate domestic express business and global express operations in neighboring countries and regions through flights offered by China Postal Airlines, in which the SPB holds 51% while China Southern Airlines Co., Ltd., the largest carrier in the country in terms of fleet size, owns the remaining 49%.
Analysts held that the increasingly heated competition in the express market is the main reason for China Postal Airlines to launch the international services.
At present, the world's top four giants have captured in excess of 60% of international express business in the Chinese market. On the contrary, EMS saw its marker share is shrinking.
Apart from the international operations, EMS is also losing share in the domestic express segment as the result of progressive opening of China's logistics industry and growth of Chinese private logistics companies.
At the end of July, China Postal Airlines got approval to transport international air freight from the General Administration of Civil Aviation of China, the country's government watchdog for aviation market.
It was established in 1994 and commenced commercial operations in 1997 with a registered capital of CNY 394.9 million. It has owned 12 aircraft to fly 13 routes and 28 scheduled flights, compared with merely three planes and one route at the earlier period. After establishment, it principally deals with postal services, especially providing domestic air traffic services to EMS.
China Postal Airlines had offered express services to Japan's Osaka from Shanghai by using planes owned by China Southern.
Guan Rongshun, general manager of the carrier, said that the company has difficulty in ensuring the transport time for EMS in such way, while the situation will be quite different if it has its own cargo planes and international routes.
(USD 1 = CNY 7.97)
From www.hexun.com, Page 1, Friday, August 04, 2006 [email protected]
