- First, rapidly growing cargo handles approaching or surpassing double-digits at secondary gateways (outside of PEK, PVG and CAN); a trend which is likely coupled with e-commerce express volumes.
- Second, the increasing cargo activities of airports in central and western China.
Although China’s top-three cargo airports saw cargo volumes rise an average of 5.0% y-o-y in 2016, the main hubs of China’s homegrown express carriers saw tonnage jump an average of 13.0% y-o-y. However, given the CAAC restricted PEK and PVG from adding new flights for much of the year, the increased tonnage indicates carriers improved their existing capacity utilization and boosted load factors. Shenzhen (SZX), is currently the hub of SF Express Airlines which has the largest freighter fleet of any express carrier in China, saw tonnage rise 11.1%. Similarly, Hangzhou (HGH) the home of fellow express carrier, YTO Express Airlines saw tonnage rise 14.8% y-o-y.
Looking back at 2016, airports in eastern China handled the vast majority of freight and mail loaded and unloaded in the country, some 11.31 million tonnes or 74.9% of the total. Airports in western China handled 15.3% of the tonnage, while airports in the central and northeast and China handled 10% and 6.1% respectively. This is already beginning to change. Tonnage growth was almost unanimously in double-digit territory for the west-central cities of Zhengzhou, Chongqing and Chengdu. Western airports will continue to benefit in the coming years as China’s economy increasingly transitions towards a consumption-driven model, which is supported by development initiatives from the Chinese government like “Go-West” and “One Belt, One Road”, and as express airlines move their hubs inland to better serve all regions of the country.
Both express airlines will shift much of their network focus to new bases in western and central China over the next five years. SF Express Airlines has announced plans to develop its global air freight hub in Ezhou with the construction of a new airport. YTO Express Airlines meanwhile, is planning to launch a jv airline which will operate out of Xi’an. As express carriers migrate inwards, this will reinforce the trend of rapidly-growing cargo handles at airports in western and central China.