China Southern to participate in SkyTeam Cargo

CHINA SOUTHERN AIRLINES plans to join Sky Team Cargo in a bid to strengthen its competitiveness in China's domestic market.

China Southern hopes the alliance will give it a competitive edge against Air China and China Eastern in the cargo transportation business, according to China Daily.

The move comes as the government launches another restructuring of the airline industry by combining the cargo handling businesses of the three main carriers.

It hopes that the combined company can have the capacity and capability to compete more effectively with foreign heavyweights FedEx, DHL, UPS and TNT, the report said.

Nearly 80 per cent of China's domestic air freight is handled by these four major international logistics companies.

"The cargo restructuring was initiated in early 2009 by the State-owned Assets Supervision and Administration Commission (SASAC) and the National Development and Reform Commission (NDRC) when airlines' cargo business was hit hard by the global economic crisis," Yao Jun, an analyst with China Merchants Securities, was quoted as saying.

Furthermore, Air China invited Cathay Pacific Airways to establish a cargo joint venture in Shanghai in February. China Eastern has a 70 per cent share of China Cargo Airlines, while its newly subsidiary Shanghai Airlines also owns a cargo firm in Shanghai.

"China Southern will be much more competitive once its cargo business joins Sky Team Cargo," said Mr Yao.

The report added that Luo Zuping, board secretary of China Eastern, said he was "not aware of the news," adding that China Eastern's cargo business was currently undergoing an internal restructuring that would be completed within six months.
(Source:www.schednet.com)