CHINA: China Southern eyes cargo venture

China Southern’s entry into the SkyTeam alliance brings it closer to its planned cargo joint venture with Air France-KLM. Air France Cargo chief executive Marc Boudier said the airlines have decided to move to the ‘second phase’ of the project they have been discussing since June, according to a Thomson Financial report. The two airlines […]


China Southern’s entry into the SkyTeam alliance brings it closer to its planned cargo joint venture with Air France-KLM.

Air France Cargo chief executive Marc Boudier said the airlines have decided to move to the ‘second phase’ of the project they have been discussing since June, according to a Thomson Financial report. The two airlines plan to launch a new Chinese cargo company in 2008, in which Air France-KLM will hold a 49 per cent stake and which is expected to take over the cargo activities of China Southern.

Boudier said the company would aim for sales of nearly Euro 1 billion in the medium term, as Air France-KLM currently generates sales of around Euro 3 billion from its cargo business.

The new company will begin operating with existing China Southern B747-400s as well as passenger aircraft belly hold capacity. Six Boeing 777 cargo aircraft ordered last year by China Southern will also be used by the new company.

"China is now at the heart of cargo activity,’ Boudier said according to the report. "The Chinese market already represents more sales than France and the Netherlands combined and we would not have seen cargo growth in the last years without China."