New Chinese Air Express Cargo JV Established

China's Okay Airlines, U.S.-based ATSG West Limited, and Chinese e-commerce firm Vipshop have established an express air cargo joint venture serving multiple destinations within China and surrounding countries.

The JV will be named United Star Express Airlines Co. Ltd., registered in Tianjin's free trade zone called Dongjiang Free Trade Port Zone, with registered capital of CNY400 million. It will be established pending approval by related government parties and plans to commence flight operations in mid-2016.

Specific share allocations were not released by any of the parties, but Okay Airlines will provide the largest share of the registered capital of United Star Express. Okay Airlines Chairman Wang Shusheng will be the JV company's chairman. The vice chairman will be Richard Corrado, chief commercial officer of Air Transport Services Group and President of its aircraft leasing subsidiary Cargo Aircraft Management, Inc.

The new airline will principally serve rapidly growing express air cargo demand driven by e-commerce growth in China and surrounding countries. From 2010 through 2014, the express market has been growing at an average of 30% per year.

Express air services in China now rely mostly on excess capacity in the belly of passenger aircraft. Fewer than 120 all-cargo freighters operate within China, and only a small portion of those serve express markets.

Within the first year of its flight operations, United Star Express expects to have six small and midsize freighter aircraft, including Boeing 737, Boeing 757 and Boeing 767 aircraft, to provide safe, high quality, reliable domestic and international air cargo services.

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