Jade Cargo Airlines, the joint venture between Lufthansa and Shenzhen Airlines, plans to expand its operations in the mainland's western provinces as it copes with a steep decline in the cargo business. 'It has been rough and tough from the beginning of this year but we've seen the worst already,' Kay Kratky, chief executive of the Shenzhen-based cargo carrier, said. The International Air Transport Association said the air-cargo market appeared to have found a floor after a fifth consecutive month of more than 20 per cent year-on-year declines. Jade said it saw a rebound in cargo demand for some routes after posting a 30 per cent drop in volume in the first four months from last year. 'You could see certain markets started to rebound but, on the other hand, other routes have not performed in the same way,' Mr Kratky said. Although the current cargo market was still under great pressure, he said he saw a silver lining. Jade anticipates taking part in the development of the western region and is already in talks with two or three provincial heads. 'There is huge potential in the western part of China since the government is planning to invest heavily in infrastructure,' he said. 'We have had interesting discussions with several governments and we want to be part of the development.' There have been some positive signs on the route from South Korea to Europe through the mainland. Cargo space on routes out of China were almost fully packed, Mr Kratky said. The six Boeing 747-400 extended-range freighters are based in Shenzhen, but they also pick up cargo from Shanghai before leaving for European destinations. Cargo demand out of Shanghai was better than that from Shenzhen, he added. That is due to the massive closures of manufacturers in the Pearl River Delta since last year. The new route from Shenzhen to the Nigerian city of Lagos through Chennai and Sharjah, which began in mid-April, however, has preformed worse than expected. Mr Kratky said he thought the Africa route was viable, considering the trade growth between China and Africa. But other operators are also interested in emerging markets where demand is still rising, leading to fierce competition and pressure on freight rates. Some carriers were only charging the shippers' fuel surcharges and security fees for shipments out of Europe to the east, he said. Due to the imbalance in trade between China and Europe, the load factor in the eastbound direction is very low, if not empty. 'By doing this, the carrier could get some cash flow with the hope that things will get better,' Mr Kratky said. The so-called 'minus rate' tactic is not common in the market because the operator will be hurt in the long term. The cash flow can only settle fuel costs but not financial costs and overhead.