Where’s the beef?

Where’s the beef?

Not on the tables of hungry Chinese diners – or at least not often enough nor in sufficient quantity.

At least that seems to be the conclusion drawn by Shanghai Yiqian Trading, the Chinese company that is buying Germany’s Frankfurt Hahn Airport (HHN). According to company Chairman Yu Tao Chou, Shanghai Yiqian Trading believes that increased air cargo connections between Germany and China will help satisfy the growing demand by Chinese consumers for Western products such as meat.

The Shanghai-based conglomerate stepped forward as the buyer of an 82.5% stake in Germany’s Hahn airport, 120km west of Frankfurt, listed for sale by the federal state of Rhineland-Palatinate. Moving forward, Yiqian plans to acquire the remaining 17.5% stake held by the state of Hesse, and shoulder half of future investment costs.

The announcement puts to rest a string of rumors speculating about the party most likely to acquire the struggling airport. Hainan-based HNA Group, and Henan-based Henan Civil Aviation Development and Investment Co., (HNCA) were perhaps the most likely suitors. HNA owns many global aviation assets, including a stake in Yangtze River Express Airlines, a dedicated cargo carrier which once flew into Hahn. Likewise, HNCA is deeply involved in Luxemburg-based Cargloux’s secondary hub in Zhengzhou, China, and plans to launch a joint venture airline with Cargolux in 2017. Hahn is also only 120km away from Cargolux’s main hub in Luxembourg. Seattle-based commerce giant Amazon was also reported to have met with Rhineland-Palatinate earlier this year, expressing interest in using the airport as a hub to support nearby distribution activities in Koblenz, located about 100km from the site. However, out of all the potential buyers, it is instead a Shanghai-based trading company with roots in construction hoping to inject life into the once bustling airport.

Although on paper Hahn makes sense as a cargo hub, performance has fizzled in recent years. A lack of nighttime flight restrictions indeed gives Hahn an advantage over nearby Frankfurt International (FRA). Yet Hahn’s cargo handle slid to 80,000 tonnes last year, down from a peak of 286,000 tonnes in 2011, as many airlines have diverted the operations to other airports. In comparison, Frankfurt’s annual cargo handle is over 2 million tonnes, while Luxemburg consistently handles over 1.2 million tonnes.

In the past, a healthy mix of international cargo carriers offered freighter service to the airport, but today that number has fallen to just three carriers.At present, Japan-based Nippon Cargo Airways operates six weekly flights with 747-400Fs. Azerbaijan-based Silk Way West operates a one flight per week with a 747-8, and four additional flights with a 747-400F. Lastly, Abu Dhabi-based Etihad Airways operates a single flight to Hahn on a weekly basis with a 777F, down from multiple scheduled flights in years past. Qatar Airways, Aeroflot, and Yangtze River Express previously had cargo operations at Hahn which have since ceased.

In addition to cargo flights, Hahn is also used heavily by Ryanair, as well as by other low-cost carriers including Sun Express, and Wizz air. US military charters (mostly operated by United Airlines) also frequent the airport, harkening back to its historical roots as a cold war military base.

Still, successful cargo airports require more than just a suitable location. Yiqian will have its work cut out for it to ensure that a steady supply of beef moves between Hahn and China.