CAAC expected to approve launch of Ningxia Cargo Airlines

The Civil Aviation Administration of China (CAAC) is expected to green light Ningxia Cargo Airlines, the first cargo carrier based in West China.

The new cargo entity, based in the Ningxia Autonomous Region, has a registered capital of CNY120 million ($18.98 million). Shanghai Chongda International Freight Co., which has a 40%  holding, is the major stakeholder. Shan’xi Tongyang Investment Management has a 25% stake and Shan’xi Xiangyu Logistics Co., Xi’an Huijie Logistics Co., and Shan’xi International Air Freight hold the rest.

The new venture has a Boeing fleet of 737 and 747 freighters. It plans to use pilots and MRO professionals from Turkish Orex Orbit Express Airlines.

Industry analysts said it will be difficult for Ningxia Cargo to make a profit initially because of the downturn in the air cargo industry and weak competitive position of domestic cargo carriers. China’s air cargo market is dominated by FedEx, UPS and DHL, mainly in economically strong Eastern China.

The CAAC appears to be softening its tough stance on restricting approval of new entrants. In 2007, the CAAC said it would not approve any new start-ups until 2010 except cargo carriers, West China-based carriers, or those that operate domestically produced regional aircraft because there were too many privately run domestic carriers after restrictions were loosened in 2004.

Article Source : ATW Daily News