China Cargo Carriers act to vie with foreign rivals
Jade Cargo International Co., Ltd., a Sino-Germany carrier, made its maiden flight on August 17, part of efforts by Shenzhen Airlines Co., Ltd., the Chinese parent of the joint venture, to tap the cargo segment in China.
President of Shenzhen Airlines, China's largest private airways, will take over as chairman of Jade Cargo, in which Lufthansa Cargo AG and DEG holds a stake of 25% and 24%, respectively. Shenzhen, a manufacturing center in southern China, will be the largest resource for the company.
Jade Cargo has chosen Swiss WorldCargo, the air cargo division of Star Alliance carrier Swiss International Air Lines, to be its partner for sales and services in major European markets, including France, Germany, Italy and Swiss.
Foreign investors are playing a leading role in China's cargo market for a long time. Recently, however, state-run carriers and private companies have started to cast eyes on the market along with their expansion and hope to get a slice of the profitable market.
Great Wall Airlines Co., Ltd., a joint venture by Singapore Airlines Cargo, China Great Wall Industry Corporation (CGWIC) and Dahlia Investments Pte Ltd, a wholly owned subsidiary of Temasek Holdings, has started commercial operations.
Shanghai Airlines Co., Ltd., China's first commercial airline, established a cargo arm under the help of EVA Airways Corp., the second largest airline in Taiwan.
Air China Ltd., the largest international airline in the country, intends to its own air cargo division in Shanghai to participate in the battle together with Cathay Pacific Airways Ltd., Hong Kong's flag carrier.
Shenzhen Donghai Airlines Co., Ltd., a new Shenzhen-based cargo airline, has applied to the General Administration of Civil Aviation of China (CAAC), the country's watchdog for aviation industry, for a business license.
A CAAC official said that Donghai Airlines is likely to come into operation at the beginning of next month if everything goes well, and it will mainly deal with domestic freight charter flights at the initial period of operation.
Up to the end of March, Chinese airways totally have 33 freighters, and utilizable tonnage of freight aircraft is 7,700 tons, which is only a small part of the freight capacity in US- based UPS, the world's largest package delivery company.
At present, domestic air cargo companies have caught in an awkward situation: on the one hand, the market for cargo traffic embodies huge potential for further growth; on the other hand, overseas logistics firms are the dominant force in the market. Therefore, they want to participate in the competition but stand pale beside logistics giants at abroad.
Still, air logistics magnates, including UPS, FedEx and DHL, have been making inroads into major cities in the Yangtze River Delta and the Pearl River Delta, two economically developed regions in the country and set up joint ventures with local companies to capture larger share.
In 2005, Hong Kong Airport saw 84% of its sources for goods come from the Chinese mainland, according to official data.
Yang Yuanyuan, director of Beijing-based CAAC, said at an April meeting that the freight traffic in China grew by 15.9% annually from 2001 to 2005. Boeing, the top US planemaker, also projects that the country's freight traffic is expected to increase by 10.6% each year over the future 20 years, while the global average growth is merely 6.2%.
(USD 1 = CNY 7.98)
From www.hexun.com, Page 1, Friday, August 18, 2006 [email protected]
