Airlines India, Indian Airlines

Jade Cargo International, the first Sino-German joint venture airline, is expected to play a vital role in Lufthansa’s overall expansion in China, top executives of the German aviation group said yesterday.
“We want to enhance all aspects of our China business. Lufthansa will be a strong brand in China, so that when you want to do business with Europe (in aviation), Lufthansa will come to your mind first,” said Wolfgang Mayrhuber, chief executive officer and chairman of Deutsche Lufthansa AG.

Mayrhuber made the remarks yesterday while visiting Jade Cargo’s headquarters in Shenzhen.

Lufthansa holds a 25 per cent stake in Jade Cargo, the maximum share a single foreign carrier is allowed to hold in a Chinese airline. Shenzhen Airlines controls 51 per cent of the joint venture, while the German Investment and Development Company has the remaining shares.

The maiden flight of the Shenzhen-based cargo joint venture took place from Shenzhen to Amsterdam on August 5.

It will have a fleet of six Boeing 747-400 freighters by 2008 and plans to develop a network spanning European, intra-Asian and trans-Pacific routes.

Stefan H. Lauer, a member of Lufthansa’s executive board, said that Shenzhen-based Jade Cargo would not be adversely affected by its proximity to Hong Kong, a major cargo gateway to the Chinese mainland.

“We are not taking cargo traffic away from Hong Kong. The Pearl River Delta region is a world manufacturing base, which ensures enough cargo business for three airports in the area, namely Hong Kong, Guangzhou and Shenzhen,” Lauer said.

“Shenzhen airport is currently under-utilized and we hope the launch of Jade Cargo will give it a real chance to play the important role in logistics that the airport deserves in this region,” Lauer said.

Lauer added that most cargo carriers are currently focused on the Yangtze River Delta region.

Shanghai’s cargo-handling capacity is increasing as a result of new start-up joint ventures.

For example, Great Wall Airlines Ltd, in which Singapore Airlines holds a 25 per cent stake, launched a scheduled flight from Shanghai to Amsterdam in June. It operates two B747-400 freighters.

Shanghai Airlines Cargo, a joint venture between Shanghai Airlines and two subsidiaries of Taiwan-based Evergreen Group, started flights to Los Angeles last month. The company, which currently has three freighters, plans to expand its fleet to 10 by 2010.

In addition, Air China plans to establish a cargo joint venture with Cathay Pacific in Shanghai.

Also yesterday, Lauer denied rumours that Lufthansa would purchase a stake in Shanghai Pudong International Airport’s new freight zone.

But the German carrier’s existing joint venture with Shanghai Airport Group, PACTL, will “extend its current services and play a role” in the new freight facilities, he said.

PACTL, or Shanghai Pudong International Airport Cargo Terminal Co Ltd, was established in 1999 and is 29 per cent-owned by Lufthansa.

China is Lufthansa’s largest market in Asia and accounts for 15 per cent of its global revenue. Passenger airline service, cargo and MRO (maintenance, repair and overhaul) are its biggest profit sources in China, followed by catering and IT services.