HNA Modern Logistics lifts off – with Atlas Air

Ten days ago, we reported that China-based HNA Group had established a new subsidiary in the north-central city of Xi’an. HNA Modern Logistics Group, as the company is called, will focus on developing Xi’an into a global airfreight hub, a hub which, according to CEO Zhang Weiliang, will become the “Chinese Memphis.”

To twist a well-known quote, “Memphis wasn’t built in a day.” So don’t expect to see hundreds of freighter aircraft swooping in and out of Xi’an’s Hsien Yang Airport (XIY) every night right away, but HNA Modern Logistics has taken the first step in that direction, with an agreement to ACMI-lease a 747-400F from Atlas Air Worldwide Holdings, beginning this month.

Atlas Air will operate the freighter in trans-Pacific service for HNA subsidiary carrier Yangtze River Airlines (YRA). Neither Atlas nor YRA would comment on the exact route, other than to say the freighter would “serve routes between China and the United States.” However, Zhang described the agreement as “a great beginning of HNA Modern Logistics Group launching its global strategy,” so Xi’an is a likely stop. Particularly since HNA has been testing a Xi’an-Shanghai-Anchorage-Chicago service with one of YRA’s existing 747 freighters and recently indicated it would offer the service on a permanent basis.

HNA currently has two subsidiary carriers that operate freighters (as well as several that do not).

• Yangtze River Airlines (known as Yangtze River Express until it added its first passenger aircraft in 2015) operates three 747-400BDSFs, three 737-400Fs, fourteen 737-300Fs (of which two are QCs). In addition, YRA now has six 737-800s in passenger operation.

• Hong Kong Air Cargo was spun out from Hong Kong Airlines (HKA) in April of this year, and will take over the operation of HKA’s five A330-200Fs, as well as adding 747 or 777 freighters over the next five years.

Just how the whole HNA Modern Logistics venture will play out remains to be seen. Our expectation is that Yangtze River Airlines’ cargo operations will gradually be folded into a Xi’an-based hub, with the addition of more freighters – narrowbodies to serve the domestic China express market, and widebodies for regional and long-haul service. HNA’s leasing affiliate, Hong Kong International Aviation, has six 777Fs on firm order with Boeing, some of which could wind up in YRA livery, and, of course, Atlas would no doubt be happy to provide some additional lift – Zhang did say: “It’s our pleasure to build a long-term cooperation between Yangtze River Airlines and Atlas Air.”

Those interested in learning more about Atlas Air Worldwide Holdings’ view of the air freight and express market should join us at this year’s Cargo Facts Symposium in Miami, 2 – 4 October, where Atlas CEO Bill Flynn will be our guest in a special “Fireside Chat”. For more information, or to register, visit the Symposium Website: cargofactssymposium.com.