Chinese airlines set up their own express delivery firms

A number of Chinese airlines plan to establish their own courier firms to safeguard the express delivery cargo business, which now accounts for 51% of their freight service, while many express delivery firms are also forming their own freight plane fleets, reports the Beijing-based China Economic Weekly.

In addition to its subsidiary China Cargo Airlines, China Eastern Airlines announced in September last year that it will establish an e-commerce website to combine logistics and freight operations. Air China has already established its own express delivery firm, while China Southern Airlines has entered a strategic alliance with two leading express delivery firms YTO and SF Express.

A China Eastern spokesperson said that the airline boasts major advantages in developing the express delivery business since it is based in Shanghai — a key air freight hub with a 50% market share. In addition, the airline's courier firm will kick off B2C business under the auspices of the Shanghai Pilot Free Trade Zone, as B2C relies on air shipment for both import and export, the spokesperson said.

On the other hand, Shu Xiaofeng, president of YTO Express, told the paper, "YTO is preparing to set up its own freight plane fleet, which will not affect its existing cooperation with domestic airlines and third-party agents, since our fleet will focus on safety, speed, and service quality, rather than operational scale."

He added, "We will focus on the deployment of the flight route network of our own fleet, while continuing to strengthen our strategic cooperation with domestic airlines by expanding the scale of chartered planes and full booking of cabin."

YTO plans to build a fleet of 15 freight planes within three years, according to Su, while another leading firm Shentong Express also plans to form its own fleet.

Source: Want China Times