China-based Okay Airlines, ATSG West Limited of the U.S. and Vipshop, an online discount retailer with headquarters in Guangzhou, have announced the launch of United Star Express Airlines, an express air cargo joint venture, which will serve several destinations in China - including Hong Kong, Macau and Taiwan - as well as other points in Asia.
The launch announcement was made at the fourth Annual China Air Finance Development Summit in Tianjin last week.
The new airline will principally serve the rapidly growing express air cargo market which is driven by e-commerce growth in China and surrounding Asian countries, which from 2010 through 2014, has been growing at an average of 30% per year.
United Star Express Airlines Co. Ltd., will be registered in Tianjin’s free trade zone (Dongjiang Free Trade Port Zone), with a registered capital of 400 million RMB (US$63 million) and, pending government approval, will commence flight operations by the middle of next year.
Chinese start-up airlines are increasingly competing
In a statement, the new express operator said that within the first year of its flight operations, it expects to have six small and midsize freighter aircraft, including Boeing 737, Boeing 757 and Boeing 767 aircraft. Analysts expect that United Star Express Airlines will face strong competition in China's still rapidly expanding and highly competitive express market, despite claims by the partners in the new JV that express air services in China "now rely mostly on excess capacity in the belly of passenger aircraft" and "fewer than 120 all-cargo freighters operate within China."
Analysts point out that already-established Chinese express carriers, such as SF Express and YTO Express have been rapidly increasing their fleets and networks in the past few years, solely based on the phenomenal growth rate of China’s e-commerce market, which exceeds that of the air express market.
United Star Express said that in time, it will also add medium- and long-distance cross-border express and cargo charter services that cover Europe and the America regions.
First private-sector carrier
Okay Airlines will provide the largest share of the registered capital of United Star Express. Okay Airlines Chairman Wang Shusheng will be the JV company’s chairman, while the vice chairman will be Richard Corrado, chief commercial officer of Air Transport Services Group and president of its aircraft leasing subsidiary Cargo Aircraft Management, Inc.
Headquartered in Beijing, Okay Airways is China's first private-sector airline, which operates more than 100 domestic and international routes from its bases in Tianjin Binhai International Airport and Changsha Huanghua International Airport. ATSG West is a leading provider of aircraft leasing and air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements.
Nol van Fenema