DHL Express and Air Hong Kong have signed a 15-year block space agreement, enabling the carrier’s overnight air services to continue supporting the DHL Express network until 2033.
As part of the agreement, DHL will sell its 40 per cent stake in Air Hong Kong (AHK) to majority-owner Cathay Pacific, and purchase eight of AHK’s A300-600 Freighters to be leased back to the carrier, when the deal takes effect on 1 January 2019.
The agreement will provide DHL with the same service and access to AHK’s capacity as per the current agreement, but allows for greater growth and flexibility in aircraft deployment and route selection to support DHL’s express services across Asia Pacific.
AHK is an important partner utilising more than 800 daily flights to the US, Europe and the Asia Pacific region.
DHL Express chief executive officer (CEO), Ken Allen says Asia is expected to experience exponential growth and the renewed agreement complements DHL’s strategy for Asia Pacific.
He says: “Air Hong Kong has provided the backbone of our air express capabilities in Hong Kong for 15 years since 2002, and the latest agreement with Cathay Pacific will allow it to reach even greater heights as we consolidate its operations for maximal efficiency and availability.”
Cathay Pacific CEO, Rupert Hogg says the joint venture has proved extremely valuable to both Cathay Pacific and DHL, and he expects it to continue to prove successful.
He says: “With Air Hong Kong becoming a wholly-owned subsidiary of our group, and with the block space agreement in place, these will enable us to invest in the long-term success of Air Hong Kong, which benefits from the prospering express air cargo market in the region, and capture the abundant business opportunities that are prevalent.”
DHL Express Asia Pacific CEO, Ken Lee adds: “With Hong Kong’s merchandise exports between January and September 2017 growing by 8.5 per cent compared to last year, we’re keenly aware of the upward momentum that the region’s trade lanes are facing.”
“Our renewed partnership with Air Hong Kong, combined with the new leaseback deal governing its fleet, gives us greater flexibility to add new routes and optimise our aircraft utilisation in the face of unpredictable changes or sudden increases in demand.”
DHL Express is expanding its Central Asia Hub in Hong Kong, adding 8,000sqm of space as well as new technologies including automated x-ray inspection machines and material handling systems.