China Southern Airlines Poised To Do Battle on Global Cargo Stage

25 June 2002

China Southern Airlines (NYSE: ZNH) (HKSE: 1055), the largest airline in The People's Republic of China is - with the arrival of the first-ever 747-400 freighter in China - poised and ready to do battle on the global cargo marketplace.

"Our Boeing 747 cargo fleet will take part in international cargo operations and the main battlefield will be in foreign lands," said Mr. Wang Changshun, President, China Southern Airlines Co, Ltd. Mr. Wang made his comments at the arrival of China Southern Airlines' brand new 747-400 aircraft here in Shenzhen.

Since April 2000, China Southern Airlines' Shenzhen - Chicago service has offered three flights per week. On every Wednesday, Friday and Sunday, the flight has departed from Shenzhen to Chicago via Anchorage (fuel stop only) and then return to Shenzhen via Anchorage (fuel stop only) and Shanghai. China Southern Airlines operated the service via leased 747 aircraft and through the Surface Interline Network in North America, China Southern Airlines' cargo service is able to directly deliver customer goods … loaded from the PRC, to 69 major metropolitan cities throughout America and Canada. 

As China Southern Airlines today starts the operation of its own 747 aircraft, the airline will return its current wet-leased aircraft. 

And with the delivery of this new 747-400 freighter, China Southern Airlines is throwing down the gauntlet to the world … poised on the precipice to leap right into the heated competition for the lucrative International cargo/freight business. 

Preparations for this exciting new direction for China's largest airline has been underway for some time and according to Mr. Wang, "all of our pilots are hungry, young and experienced and boast solid English-language skills.

He added that China Southern Airlines' Flight Fleets, "set up a new Boeing 747 Freighter Fleet that is comprised of 38 senior and seasoned pilots from our Guangzhou, Guilin, Hubei and Shenzhen flight bases. Twenty-two captains are from our Boeing 777, 737 and Airbus A-320 fleets and 15 of the 16 co-pilots have extensive transpacific experience between China and America. All the pilots were divided into five groups and sent to America for strict transitional flight training this last April. They are China Southern Airlines' 'cream of the crop.'

"We are very proud of them," added Mr. Wang.

Looking out on the tarmac, Mr. Wang added that seeing the beautiful new aircraft gleaming in the morning sunlight was like a "dream come true."

The inaugural flight of Shenzhen-Anchorage-Chicago-Shanghai-Shenzhen is a historic event in China Southern's history:

- It is the first Boeing 747-400F freighter ordered by China Southern Airlines;

- It is the largest and most technically advanced cargo aircraft freighter introduced in China's aviation industry;

- It marks a major first step forward by China Southern Airlines to enhance its international market competitiveness and position itself in the global air cargo development since China's entry to the WTO and, 

- It states - in unambiguous terms - China Southern's commitment to be the best airline in Asia. 

This first Boeing 747-400 in China - starts service today for China Southern Airlines and will be dedicated to the transpacific (China/USA) market. 

China Southern Airlines' second Boeing 747-400 will be delivered in early September and will be placed into service in the European and Middle Eastern marketplace.

China Southern Airlines has tagged Shenzhen as its main cargo service hub. The Pearl River Delta Area is the most important industrial and trading base in the southern region of China and offers a massive volume of imports and exports currently involving more than 40,000 Sino-foreign/contractual/wholly foreign-owned enterprises.

In 2001, Shenzhen was ranked #1 in the total volume of imports and exports in the PRC; and Shenzhen Airport was placed #4 in the total throughput of cargo, mail and luggage among all the Chinese airports with 245,000 tons of cargo, mail and luggage carried.

The Shenzhen Municipal Government has ranks modern logistics, high technology and financing as its three mainstay industries and have called for the establishment of the largest modern logistic center in Southern China. Armed with this gigantic Chinese market base, China Southern Airlines will significantly improve its Shenzhen - Chicago cargo service by solidifying and establishing its international interline cargo channels between Shenzhen and Xiamen/Guangzhou/Chongqing which will closely link its domestic and international freight service. 

"The mere fact that China Southern Airlines ordered the two brand new Boeing 747 freighters is just one of our new strategies in tapping the massive International cargo business," says Mr. Yan Zhi Qing, President of Southern Airlines Group and Chairman of China Southern Airlines Co., Ltd.

Mr. Yan explained that, "to answer the challenges caused by the overseas gigantic air cargo carriers after China's entry to the WTO and further enhance its market competitiveness in cargo transportation, China Southern Airlines separated its passenger and cargo business into two independent entities and set up a new Cargo Department, increasing our airline's investment in its cargo business." 

To ensure the freighter's safe operation, China Southern Airlines has, within the past year, organized more than 300 personnel to participate in over 20 special training classes in aircraft familiarization, mechanical/electrical/avionics/engine transition and load & balance.

In October 2003, China Southern Airlines will begin using the "New Baiyun International Airport Air Cargo Terminal" (70% share owned by China Southern). This new cargo terminal will cover a total construction area of more than 100,000 square meters with five special freighter parking aprons and an annual cargo throughput of up to 800,000 tons. 

After its opening, the new cargo terminal will become the largest and the most advanced facility in The People's Republic of China.

The largest airline in The People's Republic of China for the past 23 years, China Southern Airlines connects more than 80 cities around the globe. Major business and vacation destinations served in China include: Beijing, Chengdu, Guangzhou, Guilin, Hong Kong, Kunming, Shanghai, Shenzhen and Wuhan and as well as International service, including: Amsterdam, Bangkok, Fukuoka, Hanoi, Ho Chi Minh City, Kuala Lumpur, Jakarta, Los Angeles, Manila, Melbourne, Osaka, Penang, Phnom Penh, Seoul, Singapore, Sydney and Tokyo.