China Southern to grow cargo market share

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China Southern Airlines plans to grow its presence in the country's cargo market, especially around its home base Guangzhou, in the coming years.

The airline's freighters - five Boeing 777-200Fs, two Boeing 747-400Fs and one Airbus A300-600F - are all based in Shanghai and serve Guangzhou from there. However, the airline's president Si Xianmin said on the sidelines of the IATA Annual General Meeting in Singapore that both Shanghai and Guangzhou are important.

"The next step for China Southern is to have a bigger presence in Guangzhou and Shenzhen. The Pearl River Delta is an important market and we should be bigger there, in addition to our presence in Shanghai," he added.

His airline was scheduled to launch a cargo joint venture with its fellow SkyTeam member Air France-KLM in 2008, but that was canned due to the global economic crisis. However, in a sign that it was becoming bullish about the sector, the carrier placed an order with Boeing for six 777 freighters in May for delivery between 2013 and 2015. China Southern has not said where it would place these freighters.

The Shanghai cargo market is getting increasingly competitive with Air China Cargo, a joint venture between Beijing-based Air China and Hong Kong's Cathay Pacific Airways, receiving regulatory approval in April to launch operations with a fleet of nine 747-400Fs.

China Cargo Airlines, a company that merges the cargo divisions of China Eastern Airlines and its subsidiary Shanghai Airlines, is also due to start operations in the city shortly. Singapore Airlines Cargo has a 16% stake in the company as well. The airline operates a fleet of 13 aircraft comprising three A300s, two 747-400s, three 777s and five Boeing MD-11s.

Dedicated cargo carriers in China include Jade Cargo and Great Wall Airlines, as well as foreign carriers such as DHL, Federal Express and UPS. Airlines such as Lufthansa and Korean Air also have major presence. Xi, however, believes that domestic companies could have a bigger share of the pie.

"I believe that there is huge potential for the China cargo market, but so far the Chinese airlines are not a market player. It is good for the Chinese airline industry that there are so many plans to develop the market. We all hope that the cargo market will be dominated by Chinese airlines," he added.