Air Transport World

Fighting for a place at the table: airlines and airports maneuver for a piece of the burgeoning China freight market.(Cargo)

Of the lessons learned from the shocks that have jolted the airline industry over the past few years, perhaps the most valuable is the resilience of air cargo. Despite SARS, terrorism and avian flu, Asian airlines have managed to derive ever-increasing revenue--in one case, up to 48% of the total--from freight.

In fact, freight is now recognized as a form of insulation from the fickle whims of passenger traffic. And China, the world's fastest-growing market with 9.5% annual GDP growth and exports topping $851.2 billion in 2003--triple the 1997 number--is attracting immense interest from airports and airlines in the region as the "best ticket in town" for cargo revenue.

In late October, in a fascinating twist in the drive for freeing markets, a new dimension emerged. Chinese authorities announced, in a de facto manner through an Air China-Cathay Pacific equity tie-up, that the country's two dominant hubs would become Beijing and Hong Kong. Perhaps not coincidently, that news came just one week after Hong Kong-based Cathay was awarded 12 much-sought-after weekly freight services to Shanghai.

The Air China-Cathay linkage is seen by some China watchers as an effort by Beijing to bolster that city's hub status and temper the rapid expansion of Shanghai. Last year, Shanghai handled 1.2 million tonnes--double the year before--and soared past Beijing as China's premier cargo gateway. Hong Kong, the world's second-busiest cargo airport, handled 2.6 million tonnes while Beijing accounted for just 662,000 tonnes.

Hong Kong's drive to remain Asia's dominant cargo hub and gateway for Chinese exports is well supported by Cathay, its subsidiary Air Hong Kong Ltd. …

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