KAL establishing cargo terminal in China

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Korean Air (KAL), which is gearing up to start a dedicated cargo airline in Beijing’s port city of Tianjin, is also investing in the construction of a new cargo terminal at Tianjin.

KAL and its partners are together investing $43.85 million to build a new cargo terminal at Tianjin Binhai International Airport, KAL says in a statement, adding that the terminal will be built in two phases with phase one to start next year and be completed in 2009’s second half.

It will be built on 128,000m2 of land KAL secured on lease from the Tianjin Airport Authority, says the SkyTeam alliance carrier, which adds it will own 47% of the terminal and have a 20-year management contract and right to appoint the terminal’s CEO and chief financial officer.

The other stakeholders are: Chinese logistics giant Sinotrans, with 20%; Korea Airport Service, with 15%; Hanjin Transportation, with 10%; and Tianjin Dongfang Credit Investment, with 8%.

KAL already owns and operates cargo terminals at Seoul Incheon, Seoul Gimpo, Los Angeles, New York, Tokyo and Osaka airports and this is its first in China.

“This new terminal in the Tianjin area will become a strong foothold for KAL to advance in the Chinese air cargo market, in both transportation and ground services, enabling it to provide comprehensive air logistics services,” it says.

KAL is currently seeking approval from the Civil Aviation Administration of China to establish in joint venture partnership Grand Star Air, a dedicated cargo carrier that will operate Airbus A300Fs and Boeing 747-400Fs.

KAL has a 25% stake in Grand Star while Sinotrans has 51%. Korea’s Hana Capital and Shin Han have 13% and 11% respectively.