Soft cargo demand out of the Asia-Pacific has led Jade Cargo International to temporarily ground its fleet of six Boeing 747-400ERFs. Chief destinations served by Jade Cargo include Chennai International Airport, Incheon International Airport and Frankfurt Airport.
“The temporary suspension of Jade Cargo services is due to overall weak air cargo demand,” read a statement posted on the company’s website. “It will also provide the shareholders with an opportunity to coordinate with stakeholders to continue with the restructuring of the company’s financial structure.” No reinstatement date was provided.
Jade Cargo, a joint venture of Shenzhen Airlines and Lufthansa Cargo, utilizes Shenzhen Bao’an International Airport as its primary hub. Shenzhen Airlines has majority stake in the carrier, owning 51 percent of it. Moreover, Lufthansa Cargo and DEG each possess 25 percent and 24 percent of Jade Cargo, respectively.
Lufthansa Cargo received a giant endorsement in April, however, when its vice president of margin management, Frank Naeve, took over as CEO of Jade Cargo. Unfortunately, six months later, Lufthansa CEO Christoph Franz revealed that the carrier wouldn’t rule out selling segments, such as Jade Cargo, if profitability remained low.
“We shall withdraw from loss-making units without a reasonable turnaround perspective,” Franz stated in October.
Although the future of Jade Cargo is uncertain, one fact remains: The Chinese freight carrier isn’t alone in its struggles. Data collected by the Association of Asia-Pacific Airlines revealed that import and export markets have been soft throughout the entire Asia-Pacific, highlighted by the region’s 6.5-percent, year-over-year, decline in freight traffic in November.
Adding to the bleak picture is the fact that Asian-Pacific carriers only reduced capacity by 0.6 percent in November, leading to a 4.1 percent, year-over-year, reduction in cargo load factor.
AAPA Director General Andrew Herdman said these carriers have been adversely affected by economic uncertainty in the eurozone and other regions. “Asian carriers registered a 4.8-percent decline in international air cargo demand during the first 11 months of the year,” he stated, “reflecting cautious management of supply-chain inventory levels given the prospect of weaker consumer demand in the major developed countries.”