Recent stutters in Chinese exports and slower inbound flows have hurt international carriers serving China, but they have failed to dent the momentum of China Southern Airlines (CSA). The Guangzhou-based carrier is visibly on a roll. Its maindeck capacity has gone through the roof this year, fuelling network expansion in the long-haul arena as well as nearer to home. At the same time, CSA is building its home base into a second cargo hub and is moving to build up international e-commerce volumes.
The airline took delivery of two B777-200 freighters in June, followed by another 777 cargo aircraft the following month. With one 777 freighter delivered earlier in the year, CSA has become the largest operator of the type in China and the third-largest globally, fielding a fleet of altogether 12 777-200Fs.
Its maindeck capacity grew further this summer with the return of two B747-400Fs that had been parked earlier in response to weaker market conditions and high oil prices. With fuel prices projected to stay low, CSA management sees a role for the larger 747-400F alongside its 777 cargo planes.
The first route identified for the -400 is in the regional arena. A new service to Ho Chi Minh City and Hanoi is due to get under way in late September, operating four times a week.
The new 777 equipment is being used to beef up CSA’s long-haul network, mostly to Europe. Across the Pacific the airline has used new 777 capacity to fly four times a week between Guangzhou and Los Angeles. In Europe CSA has opened two new freighter destinations, adding London Stansted and Paris to its network.
Stansted, which has emerged as the busiest airport for cargo flights serving the British capital (although Heathrow remains the dominant air cargo gateway overall), saw the start of twice-weekly freighter flights in June. This was stepped up to three services a week in August, earlier than anticipated, according to the British airport.
All-cargo service to the French capital commenced in July, running three times a week. CSA serves Paris in tandem with Vienna to strengthen its reach into Eastern Europe. These moves have increased its maindeck footprint in Europe to five gateways, including Amsterdam and Frankfurt.
With the additional freighter operations, CSA now commands about 1,200 tons of cargo capacity a week between Europe and its home base (including belly lift). Management is looking to boost its reach beyond the European gateways by building up a road feeder service network. The plan is to cover some 100 cities across Europe with one- and two-day service options.
A different source of feeder traffic is the newly minted alliance with IAG Cargo that kicked off in August. This gives the European carrier confirmed space on CSA’s flights to a number of destinations, including Auckland, Brisbane, Melbourne and Urumqi.
“IAG Cargo has a strong global network reach and will prove an important partner in helping us to connect our customers with markets in Europe, the Americas and elsewhere,” commented Zhao Feng Sheng, CSA’s senior vice president of cargo.
At the Asian end of the long-haul network, CSA has moved to beef up freighter lift in and out of Guangzhou, which is host to all the newly launched all-cargo routes as well as the three recent 777 additions to the carrier’s freighter line-up. The idea is to build up Guangzhou as a second cargo hub in China in addition to its hub in Shanghai. CSA now has six 777 freighters each stationed at the two hubs.
With the new alignment, CSA runs freighters from Shanghai to Amsterdam, Frankfurt and Vienna in Europe, Los Angeles and Vancouver in North America and Chongqing and Tianjin in China. Guangzhou has maindeck connections to the carrier’s five European freighter destinations and to Chongqing, besides a host of bellyhold destinations.
The build-up of the Guangzhou hub should both stimulate and benefit from free trade zone development in Guangzhou, CSA management has signalled. Another source for cargo growth is supposed to be the growth of e-commerce. The airline recently launched a cross-border e-commerce platform. This does not target packages for the likes of Alibaba, but inbound flows for Chinese consumers purchasing goods on-line from overseas vendors.
CSA had a strong first half of the year in its cargo business. Its revenue ton-kilometres grew 10.7% over the period, with tonnage rising 10.1% to 712,600 tonnes. The expansion of its network and lift capacity indicates that the carrier’s management remains bullish on cargo growth, notwithstanding the recent softness in the market, which has put downward pressure on yields.
By Ian Putzger
Air Freight Correspondent | Toronto
