China key to revival in air cargo growth
Sep-30-2014 By : fcccadmin
Asia, in particular China, is key to rejuvenating growth in air cargo, a USD6 trillion industry that has suffered from sustained stagnation since the 2008 financial crisis, and e-commerce is expected to spearhead that revival, according to global aviation and air-cargo leaders meeting in Zhengzhou, China, for the first Air Cargo Development Forum. Air cargo, which transports 35% of global trade by value, has yet to return to pre-recession levels by volume, but fresh data showed acceleration in traffic growth. During the first half of 2014, world freight traffic grew 3.7%. Asia, by far the world’s largest cargo market and responsible for 39% of the total volume, recorded growth above the worldwide average in 2013, with eastern Asia growing at 4.5%. China represents 45% of the region’s air-cargo market while Chek Lap Kok in Hong Kong is the world’s largest cargo airport. Cargo throughput at Hong Kong International Airport recorded a 5% increase in 2013 to 4.2 million tons, above the regional average of 2.1%. Xia Xinghua, Director General of the China Civil Airports Association, noted that one-third of Chinese rely on e-commerce, forcing freight handlers and airlines to work together. Wang Zhiqing, Deputy Administrator of the Civil Aviation Administration of China (CAAC), said air cargo in the country experienced rapid growth between 2002 and 2010, with yearly growth close to 10%, followed by a decline in 2011 to 2013. In the first half of this year, domestic freight increased 5.7% and international 6.6%. China’s express market has grown 43.5% per year since 2008 to become the world’s second-largest after the United States, underpinned by the rise of e-commerce. China currently has 101 air freighters, 80% of which are used for express deliveries.
China to further liberalize air cargo market
By : fcccadmin
China will push for further liberalization of its air cargo market because it is vital to facilitating trade flows and expanding its economy. “China, as the biggest exporting country in international trade, relies heavily on the air cargo business. We are actually taking a proactive attitude towards air cargo liberalization,” said Han Jun, Director General of the International Affairs Department of the Civil Aviation Administration of China (CAAC) at the first Air Cargo Development Forum organized by the International Civil Aviation Organization (ICAO). International cargo traffic turnover accounted for nearly a third, or 21.07 billion ton-kilometers, of China traffic turnover of 67.17 billion ton/km last year. China’s international cargo business soared between 1980 and 2008 before it was hit by the financial crisis. It showed signs of recovery last year, when international traffic grew 8.3%. “We will lower access requirements as appropriate and also encourage Chinese airlines to expand their international routes to more domestic points, and work with foreign operators to create international routes,” Wang Zhiqing, Deputy Administrator of CAAC, said. China has signed air service agreements with 115 countries and regions, of which 21 have introduced unlimited capacity entitlements for all cargo services. The China-U.S. air traffic agreement has for the first time introduced the concept of air cargo hub operators, which are entitled to the seventh freedom traffic right – the right to operate between two points with neither being the airline’s home country. It is the only such arrangement China has reached with another country.
Cathay Pacific cargo revival hinges on festive U.S. buyers
By : fcccadmin
Cathay Pacific, one of the world’s largest cargo carriers, is hoping the Christmas season will start a little earlier this year. The last quarter, traditionally a peak season for cargo, may signal the start of a real recovery for the sluggish global cargo market thanks to new hi-tech consumer product launches and recovery in the U.S. economy, said Cathay’s Cargo Director James Woodrow. Speaking to the South China Morning Post in Zhengzhou, he said there was a good chance Apple’s iPhone 6 will help improve not only the China market but also the Hong Kong market. Mainland China is Cathay’s largest cargo market after Hong Kong, while “almost everything” it ships from Hong Kong comes from the Pearl River Delta, Woodrow said. But to Cathay the U.S. market is still more important than China. “I think critical to global cargo growth is growth in the U.S. economy. The more the U.S. and global economy accelerates, the faster our load factor will grow,” Woodrow said. Tonnage at Cathay Pacific and Dragonair increased 8.5% to 804,000 tons in the first half of the year, but there was a 6.9% decline in yield – per unit profitability. Airlines have had cargo yields eroded by overcapacity and weak demand, while the growth of belly space in passenger jets adds further cargo capacity.
Air China and Cathay Pacific inject CNY2 billion into cargo venture
Jul-01-2014 By : fcccadmin
Air China Cargo, a joint venture between Air China and Cathay Pacific since 2010, will see its registered capital rise 62% to CNY5.2 billion following a capital injection of CNY2 billion. Air China, which owns 51% of its cargo subsidiary, will pour in CNY1 billion in cash and other assets. Cathay’s 49% stake in Air China Cargo consists of a 25% equity interest held by subsidiary Cathay Pacific China Cargo Holdings and a 24% economic interest through the returns on loans it provides to Fine Star, Air China Cargo’s third shareholder. It will inject CNY500 million in cash through the former and CNY480 million in cash through Fine Star. Cathay said in an announcement to the Hong Kong stock exchange that the move would provide funds to assist Air China Cargo to adjust its fleet, reduce its operating costs and develop its cargo charter flight business with China Postal Airlines. Air China Cargo, whose principal operating bases are in Beijing and Shanghai, reported an audited net loss of CNY349 million in 2013. Andrew Orchard, Analyst at CIMB securities, said the magnitude of the capital injection was significant. “The joint venture was not doing so well. It’s been loss-making since its inception. This is a signal that Air China and Cathay are going to try to make this work out even though there have been some rumors or concerns that they would potentially shut down the operation altogether.” The joint venture has been causing losses of as much as HKD50 million per month for Cathay, the South China Morning Post reports.
Air China Cargo suffers from weak demand
Apr-30-2014 By : agxadmin
Air China Cargo continued last year to suffer from weak demand and overcapacity in the market. The unit, in which Cathay Pacific Airways has a 49% stake, saw losses of CNY349 million. Cargo yield, or the revenue for every ton per kilometer, dropped to CNY1.57 from CNY1.69. The carrier ferried 1.46 million tons of cargo, down 0.3% on the year.
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