FedEx to cancel Okay Air contract
FedEx ends USD 1.9m a month contract due to internal troubles within Okay Air.
FedEx Express is to end its contract with troubled Okay Airways, opting instead for Yangtze River Express, a cargo airline controlled by HNA Group, to maintain its domestic express air network.
The move is another setback for the Tianjin-based airline, which is desperately seeking to restart its passenger service after a lack of cash and disputes between its investors forced its service suspension.
The suspension of Okay Air’s passenger flights in mid-December interrupted its cargo service, forcing FedEx to end the 21-month collaboration which had originally been set as a five-year deal under which Fedex would lease three Boeing 737 freighters from Okay Air.
FedEx launched domestic express services in China in June 2007 by opening a domestic air hub at Hangzhou Xiaoshan International Airport and using Okay to fly two nightly circular routes covering the country’s major airports. Initial coverage of 19 cities on a next-day basis and 200 cities on a second-day basis was extended in June 2008 to 40 cities for the next-day service while transit times for key major cities were improved.
