YTO Cargo Airlines chasing cross-border e-commerce with 757Fs

Hangzhou-based YTO Cargo Airlines this year added two Precision-converted 757-200PCFs to its fleet, which previously consisted of just six 737-300Fs, with the intention of going global. Although it has taken YTO longer than anticipated to launch international cargo flights, new flight rights may soon be granted, and the carrier’s pursuit of chasing cross-border e-commerce volumes could commence.

This week, YTO Cargo Airlines applied with the Civil Aviation Administration of China (CAAC) to launch daily roundtrip flights between Zhengzhou (CGO) and Tokyo Narita (NRT) utilizing one of its 757-200PCFs. Pending approval, flights could begin as soon as next month. This application follows a previous application filed in April to operate twice-daily flights between Shenzhen (SZX) and Clark (CRK) in the Philippines, and between Changsha (CSX) and Ho Chi Minh City (SGN) in Vietnam.

Returning to the redelivery of YTO’s first two 757Fs, although the aircraft commenced operations with flights to Hong Kong (HKG), utilization of the aircraft has been low in recent weeks. The first conversion (29217, ex-China Xinjiang Airlines) appears to have been in maintenance since 17 June. The second aircraft, meanwhile (32341, ex-China Xinjiang Airlines), has been used mostly for daily roundtrip flights between Chengdu (CTU) and Hangzhou (HGH).

Securing landing slots and flight rights to international airports will become increasingly important for YTO Cargo Airlines as it plans to add three 757-200PCFs during the next six months. Further ahead, growing cross-border e-commerce volumes are expected to fuel the carrier’s demand for larger narrowbody, and perhaps even widebody aircraft. It is also no secret that Alibaba, a major-backer of YTO Cargo Airlines’ parent company, YTO Express Group, is hungry for air freight capacity. In June, Alibaba’s logistics-affiliate Cainiao unveiled a US$1.5 billion investment in a joint-venture logistics center at Hong Kong International Airport (HKIA), and YTO Express Group is a jv partner.

In related news, on 4 July France-based Bolloré Group and Alibaba Group signed a MoU to cooperate on a variety of businesses, including logistics. According to a joint statement, “Bolloré Logistics and Cainiao Smart Logistics Network agreed to work together on identifying cooperation opportunities with their respective logistics capabilities, hubs, and networks, in Asia, the Middle East, Africa, and Europe.”

As Cainiao adds global hubs, it can be expected that air freight capacity will increase in parallel. One option is to add capacity through YTO Cargo Airlines. Like many of Cainiao’s recent MoUs however, details are still forthcoming.