Earlier this week, Shanghai-based YTO Express, the parent company of YTO Cargo Airlines inked an agreement with the Jiaxing City local government to convert a 96-hectare plot of land at Jiaxing Airport (JXS) into an aviation logistics hub. Once completed, the former military airport will assume Hangzhou Xiaoshan (HGH) Airport’s current role as the main domestic hub for YTO Cargo Airlines.
YTO Express is making an initial investment of $1.08 billion to construct a 600,000 sq. meter facility at Jiaxing airport, with operations expected to commence by 2021 with an initial air cargo throughput capacity of 1.1 million tonnes. The express carrier has long stated that it plans to have fifty freighters in operation within the next few years, and this new base begins to address the question of where incoming aircraft will fly.
Although no further fleet plans were announced as part of the agreement, the scale of the Jiaxing project suggests that YTO Cargo Airlines will continue to augment its freighter fleet, which currently consists of six 737-300Fs and two 757-200PCFs. The carrier plans to take redelivery of two 757-200PCFs this year, and beyond that has up to ten additional 757-200PCF conversions on order with Precision Aircraft Solutions. On the smaller narrowbody side, YTO has at least ten 737-800BCF conversions on order with Boeing, along with options for up to ten more. Without a drop in 737-800 feedstock prices, however, Cargo Facts would not be surprised if YTO opts for additional 737-400Fs over the next couple of years.
Turning now to YTO’s future network development, the company envisions a hub-and-spoke network consisting of the main hub in Jiaxing, and eight spokes. Jiaxing was chosen because of its central location in the Yangtze River Delta, which makes up nearly half of China’s domestic and international express market. According to David Su, chairman, YTO Cargo Airlines, “From the perspective of coverage, the three-hour flight circle of Jiaxing Airport can fully cover the domestic core urban agglomerations such as the Yangtze River Delta, the Pearl River Delta, the Beijing-Tianjin-Hebei and the Chengdu-Chongqing Economic Belt.
The Jiaxing project has been in development since the airline’s launch in 2015 when a task force began exploring suitable locations for YTO’s air logistics hub. Last year the team honed-in on Jiaxing when local authorities and YTO reached an agreement to expand civilian operations at Jiaxing Airport, making room for YTO’s cargo operations.
YTO is the second Chinese express carrier to outline plans for a major global air hub. In 2016, SF Express announced plans to develop a greenfield site in the central-Chinese city of Ezhou (near the provincial capital, Wuhan) into what it believes could become the world’s fourth busiest cargo airport by 2045. From a fleet perspective, SF Express’ Airline is further along than YTO. SF Airlines’ active freighter fleet consists of 44 freighters comprising fourteen 737-300Fs, three 737-400Fs, twenty-one 757-200PCFs, a single 757-200SF and five 767-300BCFS, with additional narrowbody and widebody conversions on order.