Shanghai Airlines to build global cargo network
Shanghai Airlines Cargo International Co., Ltd., the cargo venture of Shanghai Airlines Co., Ltd., started to make a profit of more than CNY 2 million in September after coming into production in July.
The venture, jointly set up by China’s first commercial airline and Sino Prime Ltd. and Juniper Estate BV, two subsidiaries of Taiwan’s EVA Airways Corp., is predicted to see its profit grow sharply in October.
Shanghai Airlines Cargo International Co. got one MD-11 all-cargo plane and two Boeing 757 freighters from Shanghai Airlines, who holds a 55% stake in the venture. In late July, it introduced one Boeing 747 freighter.
It has captured an 11% share in the air cargo market in Shanghai, the country’s economic center, only three months after its inception. Within the year, it will also buy one MD-11 freighter, making it own five large-sized all-cargo aircraft merely half a year after its establishment.
Shanghai Airlines Cargo International Co. has launched routes to Los Angeles, Frankfort, Singapore, Bangkok, Osaka, Bombay, Macao, Hong Kong, and so forth, laying solid foundation for it to make a profit.
Zhou Chi, chairman of Shanghai Airlines and Shanghai Airlines Cargo International Co., revealed that the cargo company will build a large-sized modern cargo terminal covering a land area of 300 mu (1 mu = 667 square meters) in the Pudong Airport. It will be able to handle 2 million tons of goods a year and is likely to become the main force for the air cargo industry in Shanghai.
Shanghai Airlines Cargo International Co. will gradually construct a global route network that connects Europe, North America and Asia in virtue of the economic hinterland in the Yangtze River Delta surrounding Shanghai, functional advantages of Shanghai as a air hub, as well as the resources of international route networks and management in EVA Airways Corp., Taiwan’s second-largest carrier.
Apart from quality resources and services, Shanghai Airlines Cargo International Co. boasts its elaborate management as well.
It launches charter services in time after understanding demands by the market and high-end customers. It provides ground agency services to other airlines to raise the utilization rate of its base resources. The venture also redoubles efforts in saving costs.
Yang Yuanyuan, director of Beijing-based General Administration of Civil Aviation of China (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%.
The 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.
Air China Ltd., the largest international airline in the country, intends to set up its own air cargo division in Shanghai to participate in the battle together with Cathay Pacific Airways Ltd., Hong Kong’s flag carrier.
Jade Cargo International Co., Ltd., a Sino-Germany carrier, made its maiden flight in August, part of efforts by Shenzhen Airlines Co., Ltd., the Chinese parent of the joint venture, to tap the cargo segment in China.
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 grab larger share.
(USD 1 = CNY 7.9)
