Encouraged by Chinese government incentives, Air China Cargo has launched a new B747 Shanghai-Beijing-Vienna-Milan route three times weekly, even though it doesn’t know when the route will become profitable.
"We have seen a recovery in the global cargo business, so we plan to enhance our presence in Middle and Southern Europe," said Yao Jun, president of Air China Cargo, adding: "It's still too early to predict when the route will be profitable, because freight rates are still 20 to 30 per cent lower than a year earlier despite recovering demand."
Yao said the cargo business would benefit from stimulus policies implemented by the country's aviation regulator, which plans to grant a three-year competitor-free ‘grace period’ for airlines that launch new international cargo routes.
Carriers that launch new international cargo route services will also be granted subsidies and higher freight rates on domestic routes to better reflect market demand and costs.
"Domestic carriers have suffered from extremely low rates in the domestic cargo market and fierce competition from overseas rivals on international routes," Yao said. "The new policies signal regulatory support for us."
Aircargo Asia Pacific
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