Westward Ho: How a new Chinese cargo carrier can revive an ancient Silk Road outpost

Elbow room

The path to this Silk Road renaissance, however, is not guaranteed. Hangzhou-based YTO Airlines, for instance, knows first-hand the difficulties that many all-cargo carriers face when trying to expand operations at some of China’s busiest airports. A few years ago, the carrier tried to secure a large number of take-off and landing slots at Shanghai Hongqiao Airport (SHA), and the request was promptly met with refusal by the Civil Aviation Administration of China (CAAC). Capacity constraints and lackluster on-time departure records often mean that carriers with existing operations at an airport have priority when it comes to the distribution of new slots.

Given the geographic expanse and the population of China, however, few believe the country’s supply chain can function with only a couple major air cargo hubs. “If we talk about Europe or North America, there are more than a few significant air cargo hubs spread across the continent,” said David Su Xiufeng, vice president of YTO Express Group and chairman of YTO Airlines, in a recent interview with Air Cargo World.

“China’s economy is so huge, it will also warrant hubs in all regions of the country,” said Su as his eyes dashed across an invisible outline of the country. But the question is where? And which carriers will lead the charge?

Why not YTO?

Having already immersed himself in the world of air cargo throughout his entire career, with tenures at China Postal Airlines, Jade Cargo and Loong Air, Su has a knack for getting himself involved in cargo startups. So back in 2014, when Su’s previous employer, Loong Air, decided to funnel resources from its freighter operations into passenger operations, Su joined YTO Express – where he was tasked with launching an affiliate airline. With Su at the helm, the group moved fast. “Within about two years, we had our inaugural flight,” Su uttered with a confident grin.

Since launching operations two years ago, YTO Airlines has already placed eight narrowbody aircraft in a domestic rotation, operating from a base in Hanghzou. The carrier plans to add more aircraft just about as fast as it can acquire and crew them. Su, however, is most passionate about not just YTO’s expanding freighter fleet, but rather, the prospect of launching a joint-venture cargo airline in Western China.

“The CAAC will not allow us to fly into Shanghai, so we’re planning early to seize opportunities in the West,” Su said triumphantly.

Determining precisely where these opportunities will surface is a bit of a challenge in the vast area referred to as Western China. According to official administrative divisions, the region encompasses six provinces, two autonomous regions and the Chongqing Municipality. In the near-term it becomes less-certain where the more prominent air cargo hubs will develop, let alone which cities will matter most. But there are clues as to where demand for air cargo will intersect supply.

In some ways, Xi’an is already emerging as a bridgehead to destinations not easily accessed by rail or road. In October of last year, YTO Airlines opened an air corridor connecting Turpan in the Xinjiang autonomous region, and Yinchuan via Xi’an. Initially, the route was operated six times per -week with a 737-300F. Upon delivery of the carrier’s first 757F, at least some frequencies have since been upgauged to the larger aircraft. Su said that, apart from express parcels, the new flights are helping agricultural producers in Xinjiang connect fruits, vegetables, beef and mutton to hungry markets in other parts of the country.

But merely serving Xi’an with scheduled freighter flights will not transform it into a global hub. This, Su said, “requires a new international airline to be based in the region.” Last year, officials from the Shaanxi municipal government and YTO Express agreed to make such an airline a reality, outlining plans to establish a joint-venture cargo airline in Xi’an that will be known as China Northwest International Airlines.