Jade Cargo grounded due to lack of investment
Jade Cargo International – a joint venture of Shenzhen Airlines (51 per cent), Lufthansa Cargo (25 per cent), and DEG (an investment arm of the German government, 24 per cent – has been grounded with no word of whether the move is only temporary.
February 15, 2012
Jade Cargo International – a joint venture of Shenzhen Airlines (51 per cent), Lufthansa Cargo (25 per cent), and DEG (an investment arm of the German government, 24 per cent – has been grounded with no word of whether the move is only temporary. The grounding follows a failure by Lufthansa to secure agreement with its Chinese partners over further investment. Discussions are understood to have been going on for nearly a year, but without success. Late last year Lufthansa Cargo made it clear that its continued participation in Jade was dependent on investment by its Chinese partner. That investment now appears not to have been forthcoming, and on 31 December Jade grounded all six of its freighters and posted the following announcement on its website: “The temporary suspension of Jade Cargo services is due to overall weak air cargo demand. It will also provide the shareholders with an opportunity to coordinate with stakeholders to continue with the restructuring of the company’s financial structure.”
The carrier was formed in 2004 and finally began operation in 2006 after taking delivery of the first of six 747- 400ERFs it ordered from Boeing. The airline – the first cargo airline in China to have foreign ownership – saw its entry into the market delayed by a lack of pilots at the time. More turbulence took place over next four years, with Lufthansa having to inject funds more than once. But when Air China acquired Shenzhen Airlines, many industry watchers pointed to the fact that the much larger Air China was more focused on its Air China Cargo joint venture with Hong Kong-based Cathay Pacific.