Jade Cargo on course for take-off after Boeing deal

PUBLISHED : Saturday, 17 September, 2005, 12:00am
UPDATED : Saturday, 17 September, 2005, 12:00am

Shenzhen-based start-up Jade Cargo International is to start operations by the third quarter of next year after agreeing yesterday to spend more than US$1 billion on long-range freighter aircraft from Boeing.

The all-cargo airline, a joint venture between Shenzhen Airlines, Lufthansa Cargo and German investment bank DEG, placed orders for six B747-400ER freighters, which Boeing lists at US$236 million each before discounts.

'We plan to launch operations in mid-2006. Our network will encompass intra-Asian, European and American destinations,' general manager Rudolf Tewes said.

'China is a key manufacturing centre for the world, producing high-value goods that are good candidates for air shipment.'

It will be at least the third incarnation of Jade Cargo since its launch in November last year. The carrier had originally planned to use six smaller A300 freighters and then toyed with the idea of using mid-sized MD11 freighters, before delaying launches originally scheduled for just after Lunar New Year and in April.

The market was left wondering if Jade Cargo would ever take wing in May when two little-known mainland companies outbid minority shareholder Air China for control of Shenzhen Airlines, its majority owner.

According to deputy general manager marketing David Keary, the change of ownership had 'no influence'. But it did have to return to the drawing board when the mainland authorities vetoed a launch with leased aircraft.

'Legislative changes caused change to our plans,' Mr Keary said. 'But that had no effect on our long-term strategy to operate wide bodied aircraft to and from destinations in Asia, Europe and the US.'

The authorities at Shenzhen Baoan International Airport (SBIA) will be relieved at the boost to thinning foreign traffic after learning last month that Federal Express was leaving for Guangzhou.

Yet Hong Kong may view the development with concern.

Half of the three million tonnes of air cargo handled in Hong Kong last year originated from or was destined for Shenzhen, according to a report commissioned by SBIA.

About 95 per cent of south China's air cargo transits in Hong Kong. But, according to a recent study commissioned by the Hong Kong Airport Authority, that proportion will slip to 80 per cent by 2010 and just 47 per cent by 2020.

The new B747-400 freighters have the range to fly direct from Shenzhen to northern Europe with a full load of 110 tonnes.

'I don't think there is a requirement [to fly to Hong Kong],' Mr Keary said in November last year.

'If you look at where it comes from, most of the airfreight that departs Hong Kong comes from [the Pearl River Delta]. So there is no need to truck it to Hong Kong and pick it up from there.'