CHINA's domestic
air cargo industry has been undergoing rapid growth yet it is a sector still in
its infancy, after the China Air Transport Association (CATA) moved to place
four domestic logistics firms on its no-fly list owing to security flaws.
The action follows a fire that broke out in a storage bin on a flight that had to land at Dalian Zhoushuizi Airport in October.
According to state media, Shanghai YTO, Yunda Express, and the Huixing and Qihang courier firms have been forced to suspend air freight services until their business procedures improve.
CATA said Shanghai YTO was blamed for its incorrect classification of lithium batteries, while the other firms were punished for transporting the prohibited article vesuvian, which caused the fire.
A report by the China Daily said that Shanghai YTO has admitted negligence in security checks concerning its cargo transported on aircraft, but insists the efficiency of its express deliveries will not be affected and its cargo expansion plans will go ahead as planned.
The report said that with competition heating up in the domestic cargo industry, especially from domestic airlines, Chinese courier companies are looking to expand further. Experts anticipate airlines will look to expand through mergers and acquisitions.
China Eastern Airlines and China Southern are reported to be setting up their own shipping firms by early next year. This is prompting the country's top couriers to invest in their own aircraft to remain in the running.
The movement is being led by Shanghai-based STO Express, which said it plans to establish an air cargo unit by acquiring six to eight aircraft in 2013. The company says that over one-fifth of its parcels are delivered by air. STO collaborates with China Southern Airlines, China Eastern Airlines and Air China Ltd.
"We may want to purchase the aircraft, but we could lease. We're still to work out what works best for us," said STO spokesman Shen Tao.
The company's aims to develop an air freight hub, and is considering locations in Shanghai, Beijing, Wuhan, Chengdu or Guangzhou.
Another major express firm from Shanghai, YTO Express Co Ltd, has filed an application with the CAAC seeking permission to set up its own wholly-owned airline based in Xiashan, the capital city of Zhejiang province, according to Lang Hongfei, vice-president in charge of long-term strategy.
He said with 1,000 tons of air cargo per day, an expansion is "imperative" in a market he describes as expanding at "breakneck" speed.
So far YTO Express has been leasing three cargo planes to fly between Beijing, Hangzhou and Shenzhen using the Yangtze River Express, a cargo airline majority-owned by Hainan Air Group.
China's first private company to start major operations was the Shenzhen-based SF Express in 2009 with a single Boeing aircraft. Over the next decade it plans to add 25 Boeing freighters to its fleet of five Boeing 757s and two Boeing 737s.
The latest figure from the Civil Aviation Administration of China said domestic cargo and mail volumes grew by 2.5 per cent to 11.58 million tons in 2011, with domestic airlines carrying 5.58 million tons, down one per cent compared to the previous year.
In the first quarter of this year cargo and mail throughput recorded by all airports in China fell 1.4 per cent year-on-year, and half of the 20 biggest airports saw negative growth on the back of weaker market conditions.
The action follows a fire that broke out in a storage bin on a flight that had to land at Dalian Zhoushuizi Airport in October.
According to state media, Shanghai YTO, Yunda Express, and the Huixing and Qihang courier firms have been forced to suspend air freight services until their business procedures improve.
CATA said Shanghai YTO was blamed for its incorrect classification of lithium batteries, while the other firms were punished for transporting the prohibited article vesuvian, which caused the fire.
A report by the China Daily said that Shanghai YTO has admitted negligence in security checks concerning its cargo transported on aircraft, but insists the efficiency of its express deliveries will not be affected and its cargo expansion plans will go ahead as planned.
The report said that with competition heating up in the domestic cargo industry, especially from domestic airlines, Chinese courier companies are looking to expand further. Experts anticipate airlines will look to expand through mergers and acquisitions.
China Eastern Airlines and China Southern are reported to be setting up their own shipping firms by early next year. This is prompting the country's top couriers to invest in their own aircraft to remain in the running.
The movement is being led by Shanghai-based STO Express, which said it plans to establish an air cargo unit by acquiring six to eight aircraft in 2013. The company says that over one-fifth of its parcels are delivered by air. STO collaborates with China Southern Airlines, China Eastern Airlines and Air China Ltd.
"We may want to purchase the aircraft, but we could lease. We're still to work out what works best for us," said STO spokesman Shen Tao.
The company's aims to develop an air freight hub, and is considering locations in Shanghai, Beijing, Wuhan, Chengdu or Guangzhou.
Another major express firm from Shanghai, YTO Express Co Ltd, has filed an application with the CAAC seeking permission to set up its own wholly-owned airline based in Xiashan, the capital city of Zhejiang province, according to Lang Hongfei, vice-president in charge of long-term strategy.
He said with 1,000 tons of air cargo per day, an expansion is "imperative" in a market he describes as expanding at "breakneck" speed.
So far YTO Express has been leasing three cargo planes to fly between Beijing, Hangzhou and Shenzhen using the Yangtze River Express, a cargo airline majority-owned by Hainan Air Group.
China's first private company to start major operations was the Shenzhen-based SF Express in 2009 with a single Boeing aircraft. Over the next decade it plans to add 25 Boeing freighters to its fleet of five Boeing 757s and two Boeing 737s.
The latest figure from the Civil Aviation Administration of China said domestic cargo and mail volumes grew by 2.5 per cent to 11.58 million tons in 2011, with domestic airlines carrying 5.58 million tons, down one per cent compared to the previous year.
In the first quarter of this year cargo and mail throughput recorded by all airports in China fell 1.4 per cent year-on-year, and half of the 20 biggest airports saw negative growth on the back of weaker market conditions.
Source : HKSG.
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