ChinaCargoAirlineismorelikeChinaEasternAirline’saircargodepartmentthananindependentaircargocompanyJune20th,2001OutlineofthePack•Generalinformation•Thedomesticcargobusiness•Theinternationalcargobusiness•Thegroundservice•Theoverviewoffinancialperformance•TheoverviewoforganizationandHRCCAwasfoundedtoservechina’sboomingair-cargomarketbyleveragingshareholders’resources•CEAandCOSCOfoundedCCAtomeettheirstrategy,CEAholds70%stockandCOSCOholds30%•tillnow,CCAistheonlydomesticprofessionalair-cargocompanyinChina•It’ssaidthatanewair-cargocompanywillbesetupbyHainanAviationCo.inthenearfutureSincethegreatdevelopmentofChina’sinternationaltrade,theairfreightincreasesmuchmuchfasterthanpassengerflight.•CEAhopestodeveloptheiraircargobusinessthroughCOSCO’snetworkofshippingcargocanvassing,COSCOhasmorethan500freightforwardingagentsin150countriesallovertheworld.•Theaircompaniesusuallyfocusthemselvesonpassengertransportation,andtheyalsooperateaircargobyestablishingcargoDept.;•Consideringanocean-land-airconsolidatetransportationwithCOSCO.In1993COSCOdecidedthestrategyto“uptothesky上天”,butbecauseCAACforbidanycompanytosetupnewaviationcompanyfromthen,ithastocooperatewithexistingaviationcompany.Actually,CCAdidn’tleverageCOSCO’sresourcesverywellinthepast,anditcannotdothatwellinthefuture•thekeyskillofoceanshipping/aircargocanvassingdiffergreatly•thepropertyofgoodsarenotthesame•goodsownersnotusedtoconsignstheirairfreight-goodsandocean-shippinggoodstoasamecompany•thedistancebetweentheagentsofairfreightandoceanshippingisgreatinbigcities•It’sdifficultandtime-consumingtocooperateeffectivelybythetwopartywiththeabsenceofincentives•fewgoodsownerswillselectoceanshippingandairtransportationatonetimebecausetheobviousdifferentefficiency•Shanghaidoesnothasthespecialgeographicalandeconomicalenvironmentwhichisneededtoachieveasuccessontheconsolidatontransportation.•Asasuccessexample,Seoulisaocean-aircoordinatedtransportcenter•thereisnolargecargoairportneartheBohaiBayand胶东半岛•theairtransportpriceinChinaismuchhigherthanSeoul,andtheefficiencyismuchlower•OceanshippingfromChinatoSeoulisconvenientandacceptableCCAcannotutilizethenetworkofCOSCOeffectivelyOcean-and-aircoordinatedtransportationisnotpracticalAsthemostimportantair-cargotransportcenter,Shanghaiwillkeepagrowth-rateat15-30%,andCCAwillbethelargestserviceproviderinthismarket•Withauniqueeconomicbaseandgeographicposition,ShanghaiisEasternChina’s,eventhewholecountry’smostimportanthubforairfreight•HongKongistheformedairfreightcenterofAsia,GuangzhouandShenzhenisonlyitssubsidiaries•ManygoodsofBohaiBaypartlyflowedtoKorea,soBeijingcannotbeaairfreightcenter•generally,thegrowthrateoftransportation=growthrateofGDP*2,•theairfreightvolumefromJan.toApr.ofHongKongdropped13%,meanwhileShanghaiincreased15%year199819992000Air-cargoquantityinChina(tenthousandtons)140170.4200Shanghai57.1875.2Shanghairatio(%)4144.1CCA23.227.4CCAratioofShanghaiCCAratioofChina30.913.613.7AirfreightandrelativegroundservicesareCCA’smajoroperationsSales/marketingGroundoperationsLoadingoperationsTransportoperationsdetailscompetitors2000revenue•Warehousing•groundtransportation•cargohandling•Loadingandunloading•Spaceallotment•spacecontrol•3MD-11freighters•operationsthebellyspaceofCEA’spassengerflights•coordinateairlines•CCA•ShanghaiAirport•CEAgroundDept.•Sh...
