SF Express to Build US$5.9 Billion Airport in Central China

SF Express, China's largest express company, has received government approval to build Asia's first full freight airport in Ezhou, Hubai province, which will have two 3,600-metre runways and a 15,000-square metre terminal.

China has world's largest express delivery sector
China has world's largest express delivery sector

The new airport is expected to handle 2.45 million tonnes of cargo and 1 million passengers in 2025, SF said in a filing to the Shenzhen Stock Exchange last week. The total investment would be valued at 37.26 billion yuan (US$5.9 billion) with SF and the Hubei provincial government responsible for the fundraising, the company added.

Important traffic junction
Ezhou, a prefecture-level city in eastern Hubei, is 1,100 kilometres from Beijing and 640km from Shanghai. It is a major logistics and distribution centre in central China, which has six ports on the Yangtze River and where many important rail lines and national highways intersect and meet.
According to internet consultancy iResearch, 60 billion parcel deliveries will need to be handled in China by 2020, nearly tripling 2015’s volume of 20.7 billion.

Joint venture SF-UPS mapped out
In August, SF raised 8 billion yuan through a share placement, planning to use the proceeds to expand its freighter fleet and further expand its international network.
Last year, SF formed an alliance with UPS to collaborate on development and provision of international delivery services.
The two companies will set up a joint venture to handle international package delivery services.

Tianjin Cargo Airlines on way to become a freight giant
In another express delivery development, HNA Group subsidiary Tianjin Cargo Airlines last week received approval from the Civil Aviation Administration of China (CAAC) to acquire three B737 freighters, which starting May 2, will operate cargo services from Tianjin to Zhengzhou, Xi’an, Chongqing, Shenzhen, Urumqi, Shanghai (Pudong) and Guangzhou.
The company will be staffed with specialists from three HNA Group subsidiaries, including Suparna Airlines (formerly Yangtze River Express), Tianjin Airlines and HNA Technic Co.

China’s e-commerce race has just begun
The cargo operator said in a statement that it expects to transport 15,000 tonnes of cargo this year and plans to expand its fleet to 50-100 aircraft over the next five years on domestic and international routes to Northeast Asian countries, Europe and the U.S.
HNA Group subsidiary Tianjin Airlines holds a 44% stake in Tianjin Cargo Airlines with a CNY310 million investment, while Tianjin Aviation Logistics Co. holds a 43% share with a CNY300 investment. Yang Hang Investment Holding Co. owns 13% of the cargo carrier with a CNY90 million investment.
China has the world's largest express delivery sector, accounting for more than 40% of the world's total deliveries, thanks to online shopping.
Over 40 billion parcels were delivered last year, up 28%, generating 496 billion yuan (US$77 billion) in terms of revenue, a rise of 24.7%.
The country plans to extend the courier network and improve systems, services, and international connections by 2020 with a target annual revenue of 800 billion yuan.

Nol van Fenema

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