Okay Airlines, ATSG West Limited, Vipshop and two other joint venture parties have established China’s latest express air cargo carrier aimed at serving multiple destinations within the Peoples Republic of China (including Hong Kong, Macau and Taiwan) and surrounding countries.
The JV company will be named United Star Express Airlines Co. Ltd., registered in Tianjin’s free trade zone (Dongjiang Free Trade Port Zone), with registered capital of 400 million RMB (US$63 million). It will be established pending approval by related government parties and plans to commence flight operations in mid-2016.
Within the first year of its flight operations, United Star Express expects to have six small and midsize freighter aircraft, including B737, B757 and B767 aircraft, to provide what it described in a statement as, “safe, high quality, reliable domestic and international air cargo services”.
The new airline will principally serve rapidly growing express air cargo demand driven by e-commerce growth in China and surrounding countries, the five JV partners said. From 2010 through 2014, the express market has been growing at an average of 30 per cent, per year.
Express air services in China now rely mostly on excess capacity in the belly of passenger aircraft with fewer than 120 all-cargo freighters operating within China, and only a small portion of those serve express markets.
The growth rate of China’s e-commerce markets exceeds that of the air express market and as such United Star Express will provide third-party express and charter aircraft services that cover the country and surrounding Asia regions to domestic and international express companies.
The company said it will “gradually” add medium- and long-distance cross-border express and cargo charter services that cover Europe and the America regions.
United Star Express will be a new company that possesses its own airline operating certificate and will operate independently in accordance with international standards, with its own independent airline insignia, fleet, routes and organisation.
Okay Airlines will provide the largest share of the registered capital of United Star Express with Okay Airlines chairman Wang Shusheng becoming the JV company’s chairman. The vice chairman will be Richard Corrado, chief commercial officer of Air Transport Services Group and president of its aircraft leasing subsidiary Cargo Aircraft Management, Inc.
Okay Airlines and the other Sino-foreign parties also will contribute to the joint venture their individual strengths and resources in airline operational management, international management, market development, government resources, and financial support, the JV partners said.