YTO and VietJet partnership signals future China-Vietnam ACMI opportunities

A delegation from YTO Dragon Investment, the investment arm of Hangzhou-based YTO Express, was in Ho Chi Minh City (SGN) this week to sign a strategic cooperation agreement with low-cost carrier VietJet Air. 

Alignment with YTO opens up the possibility of freighter flights between China and Vietnam operated by YTO’s airline affiliate, YTO Cargo Airlines, sources familiar with the agreement tell Cargo Facts. The airline has five 757Fs and seven 737-300Fs.

Despite operating an all-narrowbody Airbus fleet of sixty-seven A320/A321-family aircraftVietJet’s cargo operation has been growing rapidly in recent years. The carrier’s cargo division has been trying to make a case for adding a freighter since as early as 2014, but has not yet managed to do so.  Since 2018, YTO has been operating freighter flights to SGN – additional frequencies would not be a stretch.   

YTO and VietJet plan to cater to growing cross-border e-commerce and trade volumes moving between China and Southeast Asia by linking a number of complementary business units and subsidiaries, according to a release from the Hangzhou Chamber of CommerceIn addition to airfreight transportation, the companies have identified other opportunities to cooperate in areas of international freight forwarding, and developing regional express infrastructure and services. YTO sees opportunities for its Yuanzhi Automation subsidiary to install parcel sorting equipment throughout Vietnam and Southeast Asia.  

Returning to VietJet, ancillary and cargo revenue grew to $238 million for the first half of 2019, representing 27% of VietJet’s total revenue. Cargo revenue is only a fraction of this figure, but is a growing segment.

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