China’s air cargo market looks set for more change with China Eastern and Sinotrans announcing their intention to cooperate on a new air cargo venture.
China Eastern Airlines and Sinotrans Ltd. plan to cooperate in providing air cargo services, according to China Business News. The two are currently each running their own air cargo enterprises – China Eastern is the controlling shareholder of China Cargo Airlines Ltd. while Sinotrans has a 51 per cent stake in the joint venture Grandstar Cargo International Airlines Co., Ltd
with Korean Air. Sinotrans, despite its framework cooperation agreement with Air China Limited is seeking to leverage its air cargo businesses by making use of the air capacity of China Eastern through the cooperation. It aims to put more capital and resource in building its ground transportation network in the future.
Additional air cargo consolidation in China could result from Air China’s negotiations with Cathay Pacific Airways to launch a cargo JV in Shanghai by next spring. And China Eastern subsidiary China Cargo Airlines’ could merge with Shanghai Cargo Airlines following the pending China Eastern acquisition of Shanghai Airlines.
China has nine cargo carriers that operated a total freighter fleet of 70 aircraft as of 31 December 2008. But hit hard by the global financial crisis, those carriers are suffering from serious financial difficulties, especially on international routes.
