New carrier AVIC Cargo established in China

The Civil Aviation Administration of China (CAAC) has granted “initial approval” for the establishment of a new all-cargo carrier, AVIC Cargo Airlines, which will likely focus on serving the rapidly growing domestic Chinese e-commerce market.

According to China Aviation Daily, the airline will be a joint venture of Joy Air Holding Ltd., which will have a majority 45 percent stake, Guangzhou Donlinks Group and Beijing Fuda Asset Management. The new airline, based at Guangzhou Baiyun International Airport (CAN), will offer domestic and international freight and mail service. In its CAAC application, the carrier asked for licensing for use of both 757-200Fs and Chinese-made turbo-prop MA600Fs.

Pilots, dispatchers, maintenance crews and other staff at AVIC Cargo will be brought in from Joy Air. Unless any objections are raised, CAAC said the airline will likely be approved for the operation before Dec. 21.

Both types of aircraft being sought by AVIC Cargo are well-suited for serving the staggering growth of e-commerce business within China. To provide some perspective on the relative size of the market, on China’s Singles Day holiday, Nov. 11, which can be compared to Cyber Monday in the United States, Alibaba alone had online sales of US$14.3 billion over a 24-hour period this year. Compare that number to the total retail sales – both online and in-store – for the entire U.S. in the five-day period between Thanksgiving Day and Cyber Monday this year, which totaled just $11.1 billion.