China Southern Airlines Chairman Si Xianmin stated the carrier is preparing to launch a cargo carrier with the aim of gradually increasing its freight revenue as a percentage of total revenue from 7%-8% in 2010 to 10% (Carnoc.com, 07-Jun-2011). China Southern is the only of China’s "big three" carriers, which includes Air China and China Eastern Airlines, to not have a cargo carrier. China Southern has a fleet of seven freighter aircraft with one more to be delivered shortly. Mr Si added the cargo carrier will be a wholly owned subsidiary and it will not introduce any investors in the venture, as Air China and China Eastern had done. China Eastern relaunched its China Cargo Airlines in late May-2011 while Air China Cargo commenced operations as a JV between Air China and Cathay Pacific in early May-2011.
China Southern prepares to launch cargo carrier
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Even the most sceptical investors would be forgiving for contemplating airline ownership during the travel rush. The question, and lurking problem, is what happens the rest of the year.
China's concentrated and en masse travel periods present a challenge for sustainability. Airlines local and foreign are often reduced to hoping that routes will be annually profitable based on a few weeks of travel during Chinese New Year, the brief summer peak, and the autumn holidays. With load factors consistently high, yields are weakened, either on point-to-point traffic or as Chinese airlines aggressively discount connecting/transfer traffic.
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