China slowly extends its reach

An Air China Cargo Boeing 747 Freighter

Turbulence in Chinese stocks and shares and interest rate cuts last week by the central bank of the People’s Republic of China do not reflect the growing strength of the aviation industry in the Middle Kingdom.

Whether the statistics are deemed to show that China is the largest or the second largest economy in the world, its airfreight sector has been slowly, but surely, making its presence felt, and so far 2015 has only  demonstrated that this continues – despite the air cargo market’s lacklustre peformance since the end of the US West coast port congestion.

The latest development is the approval of the joint service between China Eastern and Qantas for services between Australia and China (see story below).  Beyond simply increasing routes or their daily or weekly frequencies, the Qantas agreement is similar to the Lufthansa, All Nippon Airways cargo carrying arrangement or International Airlines Group (IAG) Cargo, Qatar Airways capacity sharing and development collaborations.

Later this year may see an Air China, Air New Zealand pact with a similar agreement to the Qantas, China Eastern deal get regulatory approval. In November 2014, Air China and Air New Zealand announced an, “strategic alliance,” that could see an increased frequency on Auckland (New Zealand), Shanghai (China), Beijing routes.

Last year, Air China also announced an emphasis on new long haul services for its cargo strategy, “to expand its international cargo network.”

This year has seen the aviation firm HNA Group buy the global cargo handler Swissport in a multi-billion US dollar deal, 14 months after the Henan Civil Aviation Development and Investment company (HNCA) invested in Luxembourg carrier Cargolux International Airlines.

Earlier this month China Southern was announced as the latest member of IAG Cargo’s Partner Plus programme. Finnair, which has been a Partner Plus member, has entered into a capacity sharing deal with IAG Cargo. A China Southern, IAG Cargo capacity sharing deal could happen in future.

Airlines, cargo handlers, the reach of Chinese industry is extending well into Europe and Australasia. At home, China is increasing its capability, in particular for passenger to freighter (P2F) conversions. Airbus told Air Cargo Week (ACW) in July that it could envisage conversion work being carried out in China for its Airbus A320 family P2F product. In this week’s issue of ACW (see page seven) the Chinese firms, HAITEC Aircraft Maintenance and Guangzhou Aircraft Maintenance Engineering (GAMECO) are part of the non-Airbus backed A320 P2F programme by aviation services company Pacavi Group. GAMECO is a joint venture between China Southern Airlines and Hong Kong-based investment firm Hutchison Whampoa. It would seem that for various parts of the airfreight industry, China is going to continue to receive the welcoming water salute worldwide.