Yuantong to build airline
Shanghai Yuantong Express Co confirmed Wednesday a plan to build its own airline to meet rising demand for expedited delivery, after the China Air Transport Association (CATA) banned the firm's Shanghai unit from sending cargoes by plane after a battery fire accident.
"We plan to invest over 5 billion yuan ($802 million) to build an airfreight base in Hangzhou, Zhejiang Province," a Yuantong Express senior manager surnamed Wang told the Global Times Wednesday. "In the coming 10 years, we will have over 20 airplanes of our own."
The company was applying to the Civil Aviation Administration of China for approval to set up its own airline, according to Wang.
But Wang denied the plan has anything to do with the CATA penalty. CATA announced on November 19 that Yuantong Express' Shanghai unit had lost its second-class air cargo agent qualification by delivering lithium batteries against regulations.
"We formed our airfreight plan long before the penalty," Wang said. "The airfreight strategy is to meet a surging demand for speedy deliveries amid the rapid pace of life."
The express business has surged over the past two years, with daily deliveries hitting over 18 million units on average this year from 10 million units in 2010, the People's Daily reported Wednesday.
Yuantong's peak daily package delivery hit 7 million units this month, double the amount last year, The Economic Herald reported Tuesday. Behind the rapid expansion of business, management loopholes also surfaced, the report said.
"Delivery demand from express firms already accounts for one-third of the total airfreight of airlines, and the percentage will rise, resulting in airlines relying more heavily on express firms," Xu Yong, chief consultant with China Express and Logistics Consulting, said.
"Having one's own airline will be a symbol of whether an express firm can grow big," Xu said, noting that a future trend for the express delivery business is a mixed mode of having self-owned planes and chartering planes from airlines.
Rival express firm Shentong is also taking action. Shentong plans to buy an airline and at least 7 airplanes, the Wuhan-based Changjiang Daily reported Wednesday, quoting a senior manager at the company.
The recent qualification cancellation case highlighted the necessity of having one's own airfreight fleet, the manager said.
CATA deprived a Beijing logistics firm of its second-class air cargo agent qualification Tuesday, the fifth case this month after those of Yuantong and three other express firms.
Reports of a flurry of violations in airmail by express and logistics firms have aroused public concern.
"The key to the safety case lies in how to ensure every logistical link can be handled properly, including whether customers lie to express firms about package contents and how couriers are trained to tell which goods are banned," said Xu.
The company was applying to the Civil Aviation Administration of China for approval to set up its own airline, according to Wang.
But Wang denied the plan has anything to do with the CATA penalty. CATA announced on November 19 that Yuantong Express' Shanghai unit had lost its second-class air cargo agent qualification by delivering lithium batteries against regulations.
"We formed our airfreight plan long before the penalty," Wang said. "The airfreight strategy is to meet a surging demand for speedy deliveries amid the rapid pace of life."
The express business has surged over the past two years, with daily deliveries hitting over 18 million units on average this year from 10 million units in 2010, the People's Daily reported Wednesday.
Yuantong's peak daily package delivery hit 7 million units this month, double the amount last year, The Economic Herald reported Tuesday. Behind the rapid expansion of business, management loopholes also surfaced, the report said.
"Delivery demand from express firms already accounts for one-third of the total airfreight of airlines, and the percentage will rise, resulting in airlines relying more heavily on express firms," Xu Yong, chief consultant with China Express and Logistics Consulting, said.
"Having one's own airline will be a symbol of whether an express firm can grow big," Xu said, noting that a future trend for the express delivery business is a mixed mode of having self-owned planes and chartering planes from airlines.
Rival express firm Shentong is also taking action. Shentong plans to buy an airline and at least 7 airplanes, the Wuhan-based Changjiang Daily reported Wednesday, quoting a senior manager at the company.
The recent qualification cancellation case highlighted the necessity of having one's own airfreight fleet, the manager said.
CATA deprived a Beijing logistics firm of its second-class air cargo agent qualification Tuesday, the fifth case this month after those of Yuantong and three other express firms.
Reports of a flurry of violations in airmail by express and logistics firms have aroused public concern.
"The key to the safety case lies in how to ensure every logistical link can be handled properly, including whether customers lie to express firms about package contents and how couriers are trained to tell which goods are banned," said Xu.
