New cargo carrier eyes China' express market

A new cargo airline catering to China's burgeoning express and e-commerce business was set up yesterday by investors including mainland passenger airline OKAIR and Air Transport Services Group (ATSG), a Nasdaq-listed US company that specialises in medium widebody freighters.

OKAIR will hold a 43 per cent stake in the newly formed United Star International Express Airlines, while ATSG West will be a 25 per cent owner and mainland e-commerce company VIPSHOP will have 12 per cent.

Richard Corrado, chief commercial officer at ATSG, the world's largest owner and operator of converted B767 freighters, said: "The international cargo market is not good at the moment but the Chinese domestic market is good, especially the express market that is growing at 40 per cent every year … we project demand for medium widebody freighters to pick up in China, so we believe it is a good time to enter the market."

A B767 freighter carries around 60 tonnes, compared with around 18 tonnes for a narrowbody B737 and 110 tonnes by super-large B747 freighters.

The freighter fleet in China, less than 120 planes, is dominated by narrowbody B737s in domestic operation and a small number of B747s on intercontinental routes.

OKAIR vice-president Lu Chao, who will be United Star's general manager, said it planned to start with six freighters in the middle of next year, when it was expected to gain a licence to operate, and grow to a fleet of 30 planes in five years.