SF Express offloads stock to purchase aircraft

SF Airlines is eager to acquire aircraft, could future order books include additional 767Fs like this one?

On 22 August, rapidly growing Shenzhen-based SF Express raised US$1.2 billion from a stock placement, freeing capital it plans to use for growth-focused investments including the purchase of new aircraft, pilot recruitment, and technology R&D, according to a filing on the Shenzhen Stock exchange.

Local media reports suggest that SF Express will allocate at least $405 million of the proceeds to its airline subsidiary, SF Airlines, for the acquisition aircraft. Cargo Facts expects SF to add both widebody and narrowbody freighters to its fleet in the coming years to fuel its ambitious growth plans, although no new orders have been publicly announced. Earlier this month, the carrier’s fleet surpassed 40 aircraft (albeit only briefly, since one 757-200 was ACMI-leased to Suparna Airlines).

Already the operator of the largest express freighter fleet in China, SF Express intends to maintain that position through the expansion of its airfreight network. SF’s network is well-developed across China’s heavily-populated east coast, and is slowly moving westward.  The carrier is currently active in the central Chinese city of Ezhou where it is developing what will become SF Airlines’ global airfreight hub “Aerotropolis”, under the direction of Chung Mak, who was previously VP, Asia Pacific at Atlas Air.

Moving further west, on 23 August, the Xinjiang Airport Group and SF Express signed a “strategic cooperation agreement” to build a new 10,000 sq. meter warehousing facility onsite at Urumqi Diwopu International airport in Xinjiang, China. When operational in November of this year, it will be the first major airside cargo facility in western China dedicated to processing express parcels. The automated facility will be capable of handling 18,000 parcels/hour, with average daily throughput of up to 1,200 tonnes of cargo and mail, according to local media reports.

SF Airlines does not currently operate scheduled freighter flights from Urumuqi, though it is expected to soon join China Postal Airlines, the only express carrier currently operating at the airport. Before too long, however, both SF and China Postal are likely to face competition from fellow express carrier, YTO Express Airlines, which has also expressed an interest plans in serving the Western outpost.

As far as international flights are concerned, the CAAC this week outlined a proposal that would open competition between domestic airlines by removnig limits on the number of carriers allowed to serve long-range international routes of more than 4,500 kilometers.  This has major implications for passenger flights where, despite heavy demand for flights between megacities like San Francisco and Shanghai, only a single Chinese carrier, China Eastern is allowed to operate the route.  For cargo flights, this could mean that multiple cargo airlines could operate parallel routes. For example, where previously SF Express and YTO Express would not both have been allowed to launch service to Amsterdam from Urumuqi, the new policy could allow for such competition.

To hear more from SF, join us at the Cargo Facts Symposium in Miami, 2 – 4 October, where SF Express Americas General Manager, Patrick Frith, will be speaking. To register, or for more information, go to CargoFactsSymposium.com.

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