INVESTING IN CHINA: A dogfight for courier service dominance
When FedEx paid Dollars 880m for Flying Tigers, a cargo airline, in 1988, it was buying a piece of Chinese history. Flying Tigers was founded by, and named after, a group of American volunteer fighter pilots who flew for China against Japanese forces in the second world war.
FedEx, however, was more interested in the international cargo network that came with the deal – including access to China.
The acquisition helps explain why, nearly two decades later, FedEx operates more flights to China than any other express delivery company.
Next month, the company will add a further three flights, taking its weekly total to 26, and work is under way to relocate its regional hub from the Philippines to the southern Chinese city of Guangzhou.
But while FedEx enjoys aerial supremacy in to and out of China, inside the country it faces a much tougher dogfight with its rivals DHL, UPS and TNT. FedEx’s need to strengthen its domestic capabilities explains why it agreed a Dollars 400m deal last month to take full control of its Chinese joint venture with Tianjin Datian W. Group.
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