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Cargolux's JV airline delayed amid fears of China-US trade war

STRAINED US-China relations are likely to create challenges for the supply chain, and has resulted in Cargolux's Chinese airline joint-venture, Henan Cargo Airlines, staying on the back burner for a little longer, Cargolux CEO Richard Forson revealed

Cargolux's JV airline delayed amid fears of China-US trade war

STRAINED US-China relations are likely to create challenges for the supply chain, and has resulted in Cargolux's Chinese airline joint-venture, Henan Cargo Airlines, staying on the back burner for a little longer, Cargolux CEO Richard Forson revealed

16 December 2018 - 19:00

STRAINED US-China relations are likely to create challenges for the supply chain, and has resulted in Cargolux's Chinese airline joint-venture, Henan Cargo Airlines, staying on the back burner for a little longer, Cargolux CEO Richard Forson revealed.

'We have not seen any major impact so far from the tariffs,' Mr Forson was quoted as saying in a report by London's Loadstar. 'But it is a concern. If it becomes a full-blown trade war, then yes, there could well be an impact on the industry and trade lanes could change.'



He said the carrier was studying the trade between the US and China to try and ascertain by how much it might reduce.



While the Chinese airline has been struggling to get off the ground for bureaucratic reasons, the potential trade war has also led to a reduction in urgency as the shareholders adopt a wait-and-see attitude.



'The airline is still in progress, there is a lot of bureaucracy that has to be followed. It'll be interesting to see what happens with China and the US - if there is resolution, then that's positive, but if there is a full-blown trade war, then that is a significant risk.



'The project team are still working on it and we have revised the business plan. There is no specific launch date, and there can't be without a lot more certainty.



'There are major trade lanes from Asia to the US, and a lot of carriers out of the US, as well as out of Hong Kong and China. We have to take that into account too.'



The new airline is a joint venture with HNCA, Henan Airport Group and Xinggang Investment Group and was in the original agreement when HNCA invested in Cargolux.



'HNCA will be pretty happy with the airline's performance in the past two years and we have contributed quite a bit at Zhengzhou. There are new airlines coming in; it's quite a busy airport now, with high volumes that we have achieved in four years.'



He added: 'I am very happy with the performance of Cargolux in China, and Hong Kong in particular - it has possibly been better than last year. During the peak we have added frequencies into Zhengzhou for the transpacific and Europe.



'China has continued to see GDP growth, and we have flights into Zhengzhou, Shanghai, Beijing and Hong Kong.



'Exports into China have not been as strong from Europe this year, there could be reduced demand on the consumer side. Last year exports out of China were so strong that lots more capacity came in - forwarders aren't struggling with that any more.'


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