Air China Cargo launches a new future

Air China Cargo recently took redelivery of the first of four freighter-converted 757-200PCFs it ordered from Precision Conversions. Touch labor on the conversion was performed at TAECO’s Xiamen facility, where the second of the four is now in conversion. The third and fourth will enter conversion early next year, but at the Air China Technic maintenance facility in Chengdu.

The redelivery of the first unit marks the beginning of a major change for Air China Cargo. Originally the cargo arm of Air China, it is now a 50/50 joint venture of Air China and Cathay Pacific. In the past, it operated in what might be called the usual way – a medium-size fleet of 747 freighters, flying mostly China-US and China-Europe. But with the air freight landscape changing rapidly, and fuel prices rising, operating in the “usual way” was no longer profitable. So Air China Cargo has opted for a complete makeover.

Instead of eleven 747-400 freighters (most of which were converted passenger aircraft) the new fleet will consist of eight 777Fs and four 757-200PCFs. The 777Fs (the first of which is scheduled to enter revenue service on 1 January) will replace the 747 freighters, offering twin-engine operating economics and longer range. The 757-200PCFs, however, are a step in a completely new direction…

The most-rapidly expanding air freight market in the world is China’s domestic market, with the growth driven by an explosion of e-commerce. The people of China have taken to online shopping with a passion, and the demand for package delivery is growing so rapidly that it far exceeds available capacity. The existing players – China Postal Airlines and SF Express – are expanding their fleets as fast as they can, and new entrants such as Shanghai’s YTO Express have applied for operating certificates and have ordered narrowbody freighter conversions.

Enter Air China Cargo. A carrier with access to narrowbody 757 feedstock through parent Air China, and a desire to take advantage of the new demand, but with no experience in the express business. The answer was an agreement with China Postal, under which Air China Cargo would operate four 757-200PCFs for China Postal. But that will be primarily an overnight express operation, and Air China Cargo’s Chief Operating Officer Titus Diu was recently quoted in Cargonews Asia as saying: “Once we are used to the 757, we can consider using it to feed cargo from various points in China to our freighter hub in Shanghai.”

The carrier has also recently installed a new IT system, and Diu said it planned to revamp its entire product range over the next two years.

So: New management (via the jv with Cathay), new fleet, new IT, new product range, and a move into an entirely new business arena (ACMI operation for China Postal). An exciting time for Air China Cargo