China-Korea tie-up may produce new cargo airline
Okay Airways, the mainland's first privately owned airline, is in discussions with Korean Air about forming a joint-venture cargo operation in a bid to capture a share of the country's booming air freight market.
Korean Air, the world's second-largest freight carrier by volume last year, yesterday confirmed to the stock exchange in Seoul that discussions were under way.
It said that it was 'studying the possibility of forming a venture in China, but at this stage nothing has been confirmed'.
'The talks are very preliminary,' a Seoul-based spokesman for the Korean airline said.
'The China market has huge potential, so it is a natural place for us to focus.'
Okay has its headquarters in Beijing but operates flights from Tianjin's Binhai International Airport.
In March, the airline turned to Korean Air to lease the launch aircraft for passenger services to mainland cities such as Kunming, Changsha, Guilin and Hohhot.
The carrier, which is majority owned by Beijing Okay Traffic & Energy Investment, had been due to lease two 180-seat Boeing 737-900s, but scaled back its ambitions to operate a single aircraft.
'The second 737 was supposed to be leased to them at around the same time as the first, but the delivery was delayed at Okay's request,' the spokesman said.
Okay was registered in February with a start-up capital of 300 million yuan.
Binhai airport has seen substantial growth in passenger and cargo volumes over the past few years.
The airport handled about 1.7 million passengers last year, up 54.5 per cent year on year, according to Sydney-based consultancy the Centre for Asia Pacific Aviation (Capa).
Tianjin's airport handled almost 71,000 tonnes of freight, up a comparative 45 per cent. The airport is regarded as the gateway to the industrial heartland of China's Bohai Rim area.
The country's airports moved 8.8 million tonnes of cargo last year, according to Capa, which expects cargo volumes to reach 22.5 million tonnes by 2020.
Management at Korean Air said earlier this year that the airline aimed to be the world's biggest cargo carrier by 2007.
If the venture proceeds, it will be the third all-cargo airline with a foreign partner in China after ventures formed by Singapore Airlines and Lufthansa, neither of which is operational.
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