May 16, 2016

CPA/LCAG set to start JV on HK-Europe routes

(From left) Mark Sutch, General Manager Cargo Sales and Marketing of CPA; Simon Large, Director Cargo of CPA; Peter Gerber, Chairman and CEO of LCAG; Bernhard Kindelbacher, Senior Vice President of Strategy, Subsidiaries and Business Development of LCAG

Cathay Pacific Airways (CPA) cargo division and Lufthansa Cargo (LCAG) are set to enter into a joint venture of cargo business. Their top executives had reached agreement on an highly integrated mutual cooperation on the routes between Hong Kong and Europe, signing it in Frankfurt. The two companies jointly made an announcement on May 12. The duo will closely collaborate on network planning, sales activities, IT and ground handling on the routes linking Hong Kong, China and Germany. To begin with, they will inaugurate transport utilizing that framework early 2017, and start ex-Europe service during 2017. They will go ahead with the JV, abiding by the related laws including competition act in EU and Hong Kong.

The collaboration of CPA, headquartered in Hong Kong where world's largest cargo volume is handled, and LCAG, based in Frankfurt where Europe's largest international cargo volume is handled, is expected to build a network linking each forte market. "Our joint network has more than 140 direct flights per week", explained Simon Large, Director Cargo of CPA. He, showing a high hope, went on to say, "We operates lots of direct flights bound for multiple destinations all over Europe. So the collaboration will perfectly fit Frankfurt's function as the most important cargo hub in Europe, where we have forte, and a wide range of our feeder networks there".

Peter Gerber, Chairman and CEO of LCAG, stated, "The increase of unique and flexible choices that combine direct and feeder flights will enable us to realize for customers faster lead time to arrival airports", emphasizing benefits from the network expansion. And he also said, "We will be able to broaden the transport choices for cargo which in the past has been confined, dependent on its sizes and characteristics, to freighter airplanes due to limits of loading capacity".

Regarding cargo's physical operation, they consider beginning by handling cargo collaboratively at their hubs at Hong Kong and Frankfurt airports. For customers, there is merit that points of unloading and receiving cargo can be integrated into one place.

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