Air China Cargo launched a new three times weekly route between China and Europe this week utilising Boeing 747 equipment on the route from Shanghai- Beijing to Vienna-Milan.

“We have seen a recovery in the global cargo business, so we plan to enhance our presence in middle and southern Europe,” said Yao Jun, president of Air China Cargo.

“But it’s still too early to predict when the route will be profitable because freight rates are still 20 per cent to 30 per cent lower than a year earlier despite recovering demand,” he added.

The carrier has been transferring its major cargo fleet to Shanghai, the world’s fourth-largest cargo hub by volume. About 70 per cent of Air China’s cargo business is out of Shanghai.

The Civil Aviation Administration of China meanwhile, said in a proposal on Monday that it planned to grant a threeyear grace period for airlines that launch new international cargo, during which time rival airlines won’t be allowed to operate on the same routes.

Carriers that open new international cargo routes will also be granted subsidies and higher freight rates on domestic routes to better reflect market demand and costs.

“Domestic carriers have suffered from extremely low rates in the domestic cargo market and fierce competition from overseas rivals on international routes,” Yao said. “The new policies signal regulatory support for us.”

China’s air cargo volume, which was damped by waning global demand, recovered in August with 18.1 per cent growth from a year earlier. That followed a year-on-year expansion of 3.2 per cent in July.