The Civil Aviation Central and Southern Bureau of the Civil Aviation Administration of China (CAAC) has approved the establishment of a new Chinese cargo carrier, Zhongzhou Airlines Co., Ltd., based out of Zhengzhou Xinzheng Airport (CGO). The airport also serves as Cargolux’s China hub.
Zhongzhou Airlines is a joint-venture between Chinese freight-forwarder Henan Zhongzhou Tengfei International Freight Forwarding Co., Ltd. and Zhongzhou Airlines.
The carrier will launch with a capital expenditure of CNY 600 million (USD 89 million), of which airline directors Zhanyang and Shengli Song will each contribute 30 per cent; while Henan Zhongzhou Tengfei International Freight Forwarding will invest the remaining 40 per cent.
Also involved in the airline is Xu Jianguo, former party secretary and deputy general manager of the China Southern Airlines Engineering Department. Xu was the key person behind Zhongyuan Airlines, the first local passenger airline of Henan.
The all-cargo carry will utilise B737 freighters and has been given the green light by the CAAC to fly domestic routes in China, including Hong Kong and Macao, as well as international routes for the carriage of cargo and mail.
Big plans for Zhengzhou
Located in Central China, Zhengzhou Airport is gaining traction due to its strategic location, its rapid development and its surrounding multimodal infrastructure. The local government is keen to make the airport a major cargo hub and has established a free trade zone and processes to improve customs clearance at CGO. The airport is already China’s 7th busiest airport in terms of cargo volumes counting no less than 15 all-cargo airlines including heavyweights Cargolux and AirBridgeCargo and 13th busiest for passengers (24.3 million passengers in 2018).
Since 2012, the construction of the Zhengzhou Aviation Economic Comprehensive Experimental Zone has been the top priority of the Standing Committee of the Henan Provincial Party Committee.
According to the plan, the strategic positioning of the Zhengzhou economic zone is focused on the international aviation logistics sector, supported by a modern industrial base led by the aviation economy. The zone is to form an important gateway for the opening up of the inland areas, a modern aviation city, and the core growth pole of the Central China Economic Zone.
The master plan aims to introduce a large base airlines, air freight forwarding companies, logistics integrators and establish local airlines. This includes coordinating the development of all cargo freighter flights and passenger aircraft belly cargo, as well as promoting the development of international direct flights, air feeder and air express services, air-to-air transfer and air-land transport.
Of Cargolux and others
A key element of these plans was the planned launch of Cargolux’s new joint-venture airline, CGO-based Henan Cargo Airlines – a joint-venture between Cargolux, Henan Civil Aviation and Investment Co. (HNCA), Henan Airport Group and Xinggang Investment Group. To-date the carrier has still not gotten off the ground and with the revised date by end of 2018 having come and gone, Cargolux says the launch has been facing bureaucratic delays, made that much worse by the ongoing trade war between the US and China.
Local media in China have reported that the carrier’s Air Operator Certificate (AOC) is expected to be issued in the coming months in order for the joint venture carrier to begin operations by end of 2019.
And in the seemingly ever-changing China aviation market, a new combination carrier may soon see the light of day, courtesy of largely government investment entities in the form of Zhengzhou Air Central China International Aviation Holdings Limited (Air Central China).
Speculation centres around Okay Airways Co Ltd (OKAir) – China’s first privately-owned airline which took flight in 2005 – and recently became 70 per cent owned by Air Central China. Pundits suggest the remaining stake will be bought up by the Zhengzhou-based investment company and the airline relocated to hub out of CGO, thus fulfilling another key ambition of the Henan planners.
Air Transport Services Group (ATSG) is in the process of converting two B737-400 aircraft to freighter configuration for lease to Okay Airways, which began its cargo operations back in 2007 with three leased Boeing 737-300F aircraft as a local partner of FedEx Express.
Meanwhile, Azerbaijan-based Silk Way West Airlines is increasing its four times a week B747F service between its Baku hub and China’s Zhengzhou (CGO) to six per week as it seeks to service the “Silk Air Route”.
And in August 2018 Volga-Dnepr Group, Henan Airport Group and Zhongyuan Asset Management signed a framework agreement to expand long-term strategic cooperation on China’s ‘Belt and Road’ initiative.
And even the low cost carrier (LCC) AirAsia was hot on Henan with the Malaysian carrier signing a joint venture agreement to establish a China-arm of its low cost carrier (LCC), with its hub in Zhengzhou, citing the city’s “strategic location and importance as a logistics hub”. The airline group signed a memorandum of understanding (MOU) in May 2017 with Henan Province and Everbright Financial Investment Holding, a unit of state-owned China Everbright Group, to form AirAsia China.
That deal died last August with no hopes for renewal the budget carrier said at end-August 2018. AirAsia gave no reason for the development other than to say the estimated USD 100 million deal, “has now lapsed as per the terms of the MOU and will not be extended,” according to a stock exchange filing.
The announcement did however come at a time that newly-elected Malaysian Prime Minister Mahathir Mohamad suspended some USD 20 billion worth of China-backed Belt and Road infrastructure projects signed under Mahathir’s predecessor Najib Razak, who faces corruption and money laundering charges.