DHL, Air Hong Kong sign 15-year block-space agreement

DHL Express extended its Air Hong Kong (AHK) agreement, which grants DHL Express access to AHK’s overnight air services. The new agreement extends to 2033.

As part of the deal, DHL Express and AHK formalized a reorganization announced in July, under which majority owner Cathay Pacific will buy out DHL Group’s 40 percent stake in AHK. Under the terms of the new agreement, DHL will also purchase AHK’s eight A300-600 freighters, which will be leased back to AHK. The deal goes into effect on Jan. 1, 2019.

Once the deal takes effect, DHL will initially have the same access to AHK’s capacity granted by its current agreement, but over time will have more access to flexible aircraft deployment and route selection to support DHL’s growth in the Asia-Pacific region.

“With Hong Kong’s merchandise exports between January and September 2017 growing by 8.5 percent compared to last year, we’re keenly aware of the upward momentum that the region’s trade lanes are facing,” said Ken Lee, DHL Express Asia Pacific CEO. He added that the deal offers the “greater flexibility” DHL needs to handle any unpredictable changes or demand increases in the region.

In addition to the AHK deal, DHL Express recently announced an expansion of its Central Asia Hub at the Hong Kong International Airport. The expansion adds 8,000 square meters and improvements including automated x-ray inspection machines and material handling systems. The expansion is scheduled for Q1 2022 completion.