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China Southern Airlines Sets Up Freight Arm to Tap Growing Market

: Nov 5, 2020 - : 1:56 am

The latest airline to jump on the cargo bandwagon is China Southern Airlines.

China Southern Airlines Cargo, which has been given preliminary approval by the Civil Aviation Administration of China (CAAC), will be based in Guangzhou. Fully owned and funded by China Southern, the subsidiary will operate Boeing 777 freighters.

The decision to set up a freight company is in the wake of the exponential growth of the international cargo sector since COVID-19. With the grounding of passenger aircraft and the lethargic recovery of passenger traffic over the last few months, there has been a shortfall of belly space. This has triggered  the need for more dedicated freight planes and services.

China Southern Airlines Cargo Logistics, the logistics arm of the carrier’s parent firm China Southern Air Holding, raked in CNY2.64 billion (USD395 million) in net profit in the first eight months of the year on operating income of CNY9.78 billion.

In September, CSACL started mixed-ownership reform, inviting the injection of private capital in stagnating government-controlled businesses. The company plans to provide a maximum of 15 strategic investors the opportunity to purchase a maximum of 49.5 percent equity.


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