Shanghai-Luxembourg Cargo Airline to Be Opened

Yangtze River Express Airlines is to start the country's first Sino-European cargo airline in August, in a move to explore the overseas freight market and secure a financial turnaround.

The company received a new Boeing 747-400 aircraft on Friday and plans to fly it on the Shanghai-Luxembourg air route four times a week.

Sun Hongxiang, the new president of Yangtze River Express, said the company wanted to become more competitive through exploring international cargo routes, especially to Europe and the United States.

As the first cargo airline to fly Sino-American air routes, Yangtze River Express has already flies to Los Angeles and New York. Another two Boeing 747-400 aircraft will be delivered in May and November 2008, enabling the company to add more flights to Chicago.

Forty-six airlines in Shanghai provide cargo services, but most engage in domestic services. The lack of orders often force Chinese aircraft to return empty load after shipping cargo abroad, raising costs on international services.

Statistics from the International Air Transport Association show the market share of Chinese cargo airlines dropped from 65.6 percent in 1995 to 23.8 percent in 2005.

Sun said operation costs would remain a challenge in the short term. "The situation will improve after we expand our fleet and start more international services," he said.

Yangtze River Express is China's first airline with investment from both mainland and Taiwan companies. In September 2005, Hainan Airlines, its largest stakeholder, sold 49 percent of its shares to four Taiwan companies, including China Airlines, but the company's balance sheet remained in the red.

The China-U.S. aviation service agreement requiring both countries to fully open their freight market in 2011 had given
Yangtze River Express a boost.

Sun said that the company aimed to build a fleet of 11 large aircraft by 2011 and expand its business to the peripheries of Asia, North America and Europe.

"I hope we can make up the deficits and notch up a surplus at the end of this year," he said.