Australia’s Qantas Airways has established a new subsidiary for domestic air cargo operations that will fly Boeing 737-300Fs on behalf of its joint-venture freight carrier Australian Air Express (AaE).

Oneworld alliance carrier Qantas says the new subsidiary is to be called Express Freighters Australia and it will launch operations in October.

The subsidiary will wet-lease 737-300Fs to AaE, which is a joint venture between Qantas and Australia Post that offers domestic express freight services using Boeing 727 and BAe 146 freighters operated by contract aviation company National Jet Systems.

Express Freighters Australia will start with one aircraft and four pilots, says Qantas, growing to four aircraft and up to 40 pilots by March 2007.

Earlier this year Qantas confirmed plans to convert four 737-300 passenger aircraft into freighters at its Avalon maintenance centre using kits supplied by Israel Aircraft Industries’ Bedek Aviation unit. It said at the time that the aircraft would be used to replace three of AaE’s 727s.

“Growing our freight operations is a core strategy for the Qantas Group, aimed at diversifying and strengthening our revenue base,” says group chief executive Geoff Dixon