China Focus: Corporate giants power China's air cargo market
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E-mail Xinhua, January 7, 2020
by Xinhua writer Hu Tao
BEIJING, Jan. 7 (Xinhua) -- China's air cargo market is seeing a new round of industrial layout competition by giant companies, who have taken intensive major moves to strengthen their positions.
Corporate giants at home and abroad are injecting capital and confidence into the Chinese air cargo field with larger fleets, more complete route networks and stronger infrastructure and service support.
NEW MOVES
On Dec. 24, 2019, China Southern Air Holding (CSAH) launched an air cargo company as a new business entity to further tap the market. With registered capital of one billion yuan (143.87 million U.S. dollars), the new company is registered in Guangzhou, southern China's Guangdong Province.
CSAH is the parent company of China Southern Airlines, China's largest air carrier with a fleet of more than 860 aircraft.
The move is aimed at consolidating its position in the air cargo market with services throughout the air cargo industry chain.
On Dec. 31, 2019, SF Airlines announced its all-cargo freighter fleet had reached 58 on its 10th anniversary. The Shenzhen-based airline has become China's largest air cargo airline and created a global air cargo service network with 65 destinations.
In 2020, the all-cargo freighter fleet of SF Airlines is expected to exceed 60 with over 70 global destinations.
"Chinese enterprises are constantly optimizing their global industrial distribution and strengthening their global performance. Meanwhile, Chinese customers have shown their great cross-border consumption capacity," said Liddel Li, president of SF Airlines.
"All these factors foster our sustainable growth and confidence in the Chinese air cargo market," Li said.
SF Airlines has evolved into a medium-size cargo airline over the past 10 years, a golden decade of China's booming express delivery industry and civil aviation industry.
TAKING-OFF MARKET
China's express delivery industry has become the world's fastest-growing and most dynamic emerging post and delivery market. The volume of China's express packages has exceeded the sum of the United States, Japan and Europe.
The civil aviation industry is also a highly sensitive barometer of the economy. China's civil aviation market generally maintained growth momentum, and the air cargo sector is particularly impressive.
Airports are the most important infrastructure which sustains the developments of both the air cargo and air passenger transport sectors.
Thanks to the country's sustainable economic growth and persistent support, China's civil airport sector has gained high-speed and high-quality development in the past decade, according to Zhang Rui, deputy director of the airport department of the CCAC.
Over the 2009 to 2019 period, the amount of China's certified civil airports extended from 158 to 238. Eight airports advanced into the world's top 50 airports.
In the same period, the cargo throughput of China's civil airports expanded from 8.83 million tonnes to 16.74 million tonnes.
"The enhanced air cargo capacity is a highlight in the new round of airport renovation and construction," said Zhu Qianhong, general manager of Guangdong Airport Authority.
In newly-approved airport construction plans by the CAAC, the designed annual cargo capacity of Kunming, Chongqing and Xiamen airports will all exceed a million tonnes.
The newly-opened Beijing Daxing International Airport is expected to handle more than two million tonnes of air cargo in 2025. And major air hubs in Shanghai and Guangzhou will also gain enhanced air cargo throughput capacity.
SF Express has also invested heavily in constructing an international logistic hub in Ezhou, central China's Hubei Province. With a cargo-focused airport in the hub, the Chinese express delivery giant will strengthen its worldwide air express delivery system.
NEW CHANCES
"Intensive moves of corporate giants in the Chinese air cargo market are driven by market potentials. China's huge consumption market and unleashed spending power will drive the air cargo industry into a new round of development," Zhu said.
In October 2019, Guangzhou Aircraft Maintenance Engineering Company Limited (GAMECO) and Boeing announced a plan to launch a 737-800 Boeing Converted Freighter production line at GAMECO's Guangzhou Baiyun International Airport hangar.
China's rapidly growing e-commerce and express delivery market will make air cargo a key growth driver. Over the next 20 years, the Chinese market is expected to have demand for 230 new freighters and 500 converted freighters, said Boeing's latest market forecast.
"Air France KLM Cargo greatly values the potential of China's air cargo market. We will continue to consolidate a foothold in the market through a prudent and judicious approach," said Rahul Pathak, head of Air France KLM Cargo China.
"There is no better place in the world than China where digital content and usage are embraced and welcomed. We have provided Chinese customers with a suite of 365-day, round-the-clock services on the digital platforms," he said.
Moreover, the airline has recently introduced a data platform specially designed for small and medium-sized enterprises, enabling them to stay responsive to market changes, swiftly and flexibly.
"China's air cargo market is embracing greater opportunities and challenges alongside the advance of the Belt and Road Initiative and higher demands in the global logistics system from all sectors," Li said.
"It is a major opportunity for our domestic enterprises and also new business chances for global peers," he added. Enditem
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