Two cargo Airlines Challenge International Giants

Despite the impact of the global financial crisis on global import and export trade, domestic private enterprises have been continuing with their original enthusiasm to enter the industry of air cargo. CAAC announced on 18 December 2008 that it intends to grant Shunfeng Aviation Limited and Changlong International Air Cargo Service Co., Ltd. to set up such businesses. One of investors in Shunfeng Aviation is S.F. Express Company, the first private express delivery company enter into air cargo industry of China, in head-on competition with FedEx, one of the four international express delivery giants in air cargo. According to a notice from CAAC, Shunfeng Aviation was funded by S.F. Express and Shenzhen Taihai Investment Company. The company’s registered capital is 100 million yuan, of which S.F. Express invested 25 million yuan (25%); Shenzhen Taihai Investment Company put in 75 million yuan (75%). Changlong International Air Cargo Service Co., Ltd. is jointly funded by Huixiang Shiye Investment Company, Haofu Group Limited, Asia Yingsheng Investment Co., Ltd, and Caufield Investment Company. The company registers capital investment of 200 million yuan, of which Huixiang Shiye Investment Company invested 102 million yuan (51%), Haofu Group Ltd. 48 million yuan (24%), Asia Yingsheng Investment Co., Ltd. 30 million yuan (15%), and Caufield Investment Company 20 million yuan (10%). As the largest private express delivery company in the country today, S.F. Express had planned to establish its own cargo airline two years ago. Now, S.F. Express is chartering aircraft from other cargo airlines to conduct its domestic cargo business among Shanghai, Beijing, Hangzhou, and Shenzhen. In this way S.F. Express established a crucial competitive advantage in the domestic express transportation industry: within 24 hours their parcel can move between Jiangsu province, Zhejing province, and Shanghai, as well as the Pearl River Delta and Beijing-Tianjin region -- all of which are still impossible for other private express companies. Last year, FedEx announced their high-profile entry into the Chinese express delivery market, adopting Okay Air Boeing 737 express cargo transport to other cities and cutting prices. Today S.F. Express applied to set up its own air cargo company to challenge FedEx.