The new division will be based in Guangzhou and will be wholly owned by China Southern and documents seen last year show the cargo business will have a registered capital of CNY1 billion (US$150 million), reports London's Air Cargo News.
It will operate Boeing 777 freighters on domestic and international cargo flights. According to its latest annual report, China Southern operates fourteen 777Fs and two 747-400Fs.
In its initial filing, China Southern stated that it will hand over its existing cargo slots to the new subsidiary. China Southern also stated that the head of its Shantou division, Zhang Wei, would head the new carrier and that it will move about 30 flight crew to the cargo airline.
China Southern is not the only Chinese airline to have adjusted is cargo business over the past few years as part of the government reforms.
In September 2018, Air China announced it would sell its 51 per cent stake in Air China Cargo to sister unit Capital Holding.
And in 2017, China Eastern Air Holding (CEA Holding) sold a 50 per cent stake in Eastern Air Logistics, which in turn owns 83 per cent of freighter operator China Eastern, to four companies.
Over the first seven months of the year, the China Southern has seen its cargo volumes increase by 9.6 per cent year on year to 860,110 tonnes.