China Eastern plans to begin converting its fleet of five Boeing MD-11 passenger trijets into freighters from September 1999, following Civil Aviation Administration of China (CAAC) approval to establish a new subsidiary cargo operation.
The carrier is understood to be in negotiations with Alenia-owned Aeronavali and the Boeing Aerospace Support Centre at the former Kelly AFB in Texas. China Eastern wants its first freighter in service by December 1999.
The Shanghai airline's five converted tri-jets and single MD-11 freighter will be transferred to the new carrier, which will be named China Cargo Airlines. The new operation is a joint venture with China Ocean Shipping, which will own a 30% stake, while China Eastern will hold the remainder.
Plans call for China Cargo to be established by the end of the year, with an initial capitalisation of ´500 million ($60.3 million). Until conversion of the MD-11 is completed, the new carrier intends to wet-lease freighters. Gemini Air Cargo has offered a DC-10-30 freighter, while Atlas Air, Evergreen and Polar Air Cargo have proposed Boeing 747-200Fs.
Meanwhile, China Eastern is continuing to seek CAAC permission to replace the MD-11s used on its Los Angles and San Francisco routes with new 747-400s. Boeing has submitted a proposal for six aircraft, plus four options, but the deal faces resistance in Beijing as Air China and China Southern Airlines struggle to fill their Airbus A340 and Boeing 777 capacity.
The impact of Asia's economic crisis has forced the CAAC to revise its previous projected 14% annual growth rate for cargo. The authority now forecasts freight growth of 9.5% a year, but it contends that local capacity needs to be expanded to prevent foreign carriers dominating the market.
Air freight carried by local carriers totalled 1.24 million tonnes in 1997, about 70% of that carried by Lufthansa Cargo alone.
Source: Flight International
