“Airlines cannot bear the cost,” he said in reference to the fuel costs, “but we need to get market share,” he added in what was surely a veiled reference to a slashing of rates in the China air cargo market in what is a desperate bid by many carriersin order to maintain market share.
Indeed rates have slipped 3-5 per cent this year in comparison to last, Wang acknowledged, but at nearly 70 per cent overall load factors, things are still looking bright for the Chinese cargo carrier. “But carriers from the Middle East have beenputting a lot of capacity in,” he noted.
The strategy for Air China Cargo will be to work at developing a closer relationship with the customers of its home territory, he said. The carrier has a number of key customers that are operating with Chinese partners in joint ventures, such as Samsung and Nokia, he added. “A lot of people in these companies are Chinese and we will build relationshipswith them.”
With a current fleet of four B747- 200F, five B747-400F and one Tupolev 204-120CE with orders for five more T204s, the carrier currently flies seventimes weekly to Frankfurt, twice weekly to Copenhagen and Manchester, six times weekly to New York and Chicago and four times weekly to Los Angeles and Portland.
Wang said the carrier was looking to build up a second hub in Shanghai to complement its key Beijing hub. Limited slots in Beijing is inhibiting Air China Cargo’s ability to grow there, he said, adding the carrier had been doing some transit operations out of Tianjin which is being developed into a cargo hub airport.
In terms of fleet Air China Cargo is looking at a smaller fleet type going forward, Wang said. While the four, fuelhungry B747 classics will be replaced by B747-400 combies from the passenger fleet of Air China, going forward the cargo carrier will expand its fleet with the smaller capacity T204s.
Th e 24-25 tonne capacity T204s will be used primarily on shorter haul flights between China and Tokyo, Seoul and Hong Kong. Air China Cargo will take delivery of two of the T204s in the second half this year.
Currently the bellyhold versus dedicated freighter volumes for Air China are about 50-50, but once the five TU204s join the fleet, that ratio will be closer to 55-60 per cent dedicated freighter cargo.