New cargo airline formed

China Southern Airlines and Air France KLM signed a framework agreement to launch a new cargo airline, AE Cargo.
Liu Shao Yong, chairman of the board of China Southern Airlines Co., disclosed the agreement during the annual general meeting of the International Air Transport Association in June. He said the joint venture of China Southern and Air France KLM in a new cargo airline will service freight air routes between China, Europe and America. The joint venture is still subject to the required approval of government agencies, but it may be launched as soon as next year. Liu said that China Southern will hold a 75-percent stake in the new entity, while Air France KLM will hold 25 percent. China Southern will invest aircraft, while Air France will contribute cash. After the framework agreement, the joint venture will be registered and acquire government approval next year. “The new cargo (joint venture) will be named AE Cargo (AE stands for Asia Europe) and is expected to go into formal operation next year and operate 10 aircraft, including 747s and 777s, at the initial stage,” Liu said. According to the plan, the joint venture will use 10 freighters in the next two years, including the B747 and A330. The operation base, however, has not been confirmed yet. Currently, Air China Ltd. and China Eastern Airlines Corp. have their own cargo airlines. Last year, Shanghai Airlines Co. established a cargo venture with EVA Airways Corp.