China Post to establish European HQ in Hanover

Last Tuesday, Stephan Weil, the Prime Minister of Lower Saxony in northwestern Germany, announced that, after discussions between his government and executives from China Post, the logistics company had decided to establish its European headquarters at Hanover’s Langenhagen Airport. Beginning this summer, two freighter flights per week will carry mail and express parcels between Shanghai’s Pudong International Airport, and Hanover. Ultimately, China Post envisions three flights per day between the two city pairs, according to a report in Norddeutscher Rundfunk.

If it is the intention of China Post to serve Hanover and Shanghai, it will either need to acquire new widebody freighters, or cooperate with another carrier or leasing company. China Postal Airlines does not currently operate any freighters with sufficient range to serve Hanover from Shanghai. Its fleet consists of twelve 737-300Fs, two 737-300QCs (in freighter configuration), eight 737-400Fs and eight 757-200Fs. Additionally, China Postal Airlines has reached a deal to acquire seven more ex-China Southern Airlines 757-200s, two of which have already been inducted for freighter-conversion by Precision Aircraft Solutions.

Given that China Postal Airlines is no stranger to CMI/ACMI operations, it could easily pursue either path. Air China Cargo has long operated four 757-200Fs in overnight express service on behalf of China Postal Airlines. On the international front, South Korea-based Air Incheon recently began ACMI-operating one of its 737-400Fs between China and South Korea, on behalf of the Chinese Post.

At this point it remains unclear if China Postal Airlines will add widebodies to its own fleet (perhaps in the form of used 747-400Fs), or establish a new partnership for its flights between China and Europe. A carrier partnership would most likely involve a Chinese or German carrier. The most plausible candidates would be Lufthansa, Air China Cargo, China Cargo Airlines China Southern Airlines or Yangtze River Airlines, all of which have significant cargo operations in Shanghai. But China Postal Airlines could also do an ACMI deal with just about any widebody operator. We note that Shangha-based STO Express recently began cooperating with Azerbaijan-based Silk Way West Airlines to handle its east-west express traffic, with 747F flights between Hong Kong and Europe.

Returning to China Post’s decision to set up shop in Hanover, Weil said the company had been considering other options in Holland and the UK, but ultimately selected Hanover. Initially, it appears the Hanover-Shanghai “airbridge” will consolidate and funnel European goods, and express parcels ordered through e-commerce channels to waiting customers in China. Eventually the service will also connect the Chinese diaspora in Europe with goods and parcels from China. Beyond e-commerce, Lower Saxony is also an important industrial region, home to manufacturers like Volkswagen and Mercedes-Benz, which exchange large volumes between China and Europe.