Airline News
China adds cargo carrier and Cargolux says gloom overstated
October 2nd 2015
Cargolux is in talks with Boeing to buy five additional B747-8Fs, worth $1.9 billion at list prices, the head of Europe's largest all-freight carrier said on Tuesday. Read More » The aircraft would serve a planned joint venture between Cargolux and its 35% shareholder, Henan Civil Aviation Development & Investment (HNCA), and be based in Zhengzhou, home to iPhone assembler Foxconn, Cargolux chief, Dirk Reich, told Reuters after taking delivery of the 13th of 14 -8Fs ordered by the Luxembourg-based carrier.
The Cargolux boss said: “the uncertainty in China is overvalued. If you look at the production facilities, particularly in the hinterland and look at consumption, goods of Europe are being consumed by hundreds of millions of people in the hinterland," Reich said. "It is true growth rates are no longer around 10%, but we are absolutely confident we will see growth rates of around 5% for the next years."
Cargolux is not alone in believing concerns about the Mainland’s cargo market are overstated. China's YTO Express Airlines, a new all-freighter carrier set up in Hangzhou by Shanghai YTO Express Investment (Group) Co., officially commenced operations last Saturday, with a B737-300F taking off from Hangzhou’s Xiaoshan airport for its inaugural service to Chengdu.
YTO has a registered capital of 400 million yuan and made global headlines last week when it signed for 15 B737-800BCFs during President Xi Jinping's visit to the U.S., making it the launch customer for the type.
Since 2010, China’s domestic express delivery market has recorded annual growth of more than 30%. However, domestic carriers operate fewer than 120 freighters. Only a small number are used for the express delivery market as China’s air cargo service mainly relies on using the belly hold of passenger aircraft. China's largest private delivery services firm, SF Express, launched operations in 2010 from Shenzhen and uses a mixed fleet of 22 737Fs and 757Fs, while China Postal Airlines has a 22 freighter fleet of 14 737-300Fs and eight -400s.
Tianjin-based Okay Airways also plans to launch its own cargo carrier next year, United Star International Express Airlines, with U.S. based lessor and transport provider, ATSG West Ltd, online discount retailer Vipshop and three other Mainland partners. The new venture is expected to have a registered capital of 400 million yuan ($63 million), with Okay Airways as the biggest shareholder. Okay chairman, Wang Shusheng, will be chairman of United Star. The new carrier will initially operate six freighters, made up of B737s, B757s and B767s, and has ambitions to expand its network to Europe and the U.S.
The International Air Transport Association’s (IATA’s) latest cargo statistics for China give rise to optimism. Chinese cargo carriers handled 487,200 tons of cargo and mail in July, up 6.3% year on year. Cargo traffic registered 7.3% growth on domestic routes and 4.1% growth on international routes, with a 4.7% fall on Hong Kong, Macau and Taiwan routes. For the whole of the Asia-Pacific region, however, the picture looks different. In its August update, the Association of Asia-Pacific Airlines (AAPA) said cargo freight ton kilometres dropped 0.3% in the region, but capacity was 3.3% higher year-on-year, which drove down cargo load factors by 2.2%, to an unsustainable 61%.
