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Jade Cargo temporarily halts operations amid weak air cargo demand and shareholder negotiations

3-Jan-2012 10:32 AM

Jade Cargo International announced (31-Dec-2011) the temporary suspension of Jade Cargo services "due to overall weak air cargo demand". The carried added the suspension of service will "provide the shareholders with an opportunity to coordinate with stakeholders to continue with the restructuring of the company‚Äôs financial structure". The Shenzhen-based carrier is a JV between Lufthansa Cargo (25%), Shenzhen Airlines (51%) and DEG (24%).  As a result of the suspension, the carrier's six Boeing 747-400ERFs aircraft have temporarily been grounded. According to reports in Boersen Zeitung, Jade Cargo no longer has the funds to purchase fuel for its six 747 aircraft. As previously reported, Lufthansa Cargo CFO Peter Gerber in mid Dec-2011 stated the carrier was looking for a new Chinese partner for Jade Cargo due to slowing demand growth and excess capacity in the China market (Borsen Zeitung, 16-Dec-2011). Lufthansa Cargo head of sales and marketing Andreas Otto separately stated last month if profit margins at Jade Cargo did not improve, it would not rule out a divestment from the carrier (Air Cargo News, 05-Dec-2011). "We shall withdraw from loss-making units without a reasonable turnaround perspective," he said at the time. The carrier has reportedly held talks with Bank of China and Shenzhen Airlines to agree a capital increase for undercapitalised Jade. Jade Cargo was founded in Oct-2004 with flight operations commencing in Aug-2006. The airline currently has around 390 employees. [more - original PR]