DHL to buy eight Airbus 300-600F cargo planes from Air Hong Kong
December 14, 2017: World's leading international express services provider DHL Express has recently extended its alliance partnership with AHK Air Hong Kong Limited with a new 15-year block-space agreement.
It will enable the carrier's overnight air services to continue supporting the DHL Express network until 2033.
As part of its new commercial arrangement, DHL would sell off its 40 percent stake in Air Hong Kong to majority-owner Cathay Pacific, and subsequently purchase eight Air Hong Kong's Airbus 300-600F cargo planes, which will subsequently be leased back to the carrier.
According to reports, the new arrangement is expected to offers a stable revenue stream to Air Hong Kong, and a foreseeable cost base for DHL.
The new agreement will come into effect from January 1, 2019, that will replace Air Hong Kong's current agreement with DHL, post expiry.
The agreement will initially grant DHL the same service and access to Air Hong Kong's capacity, and allow greater growth and flexibility in aircraft deployment and route selection to support its express services in the Asia Pacific region.
Air Hong Kong remains an important partner in DHL's Asia Air Network that utilises over 800 daily flights to the United States, Europe and the Asia Pacific region.
"Asia is expected to experience exponential trade growth, and our renewed block space agreement with Air Hong Kong forms a natural match to DHL's broader growth strategy in the Asia Pacific region to meet continually strong market demand," said Ken Allen, CEO of DHL Express.
"Air Hong Kong has provided the backbone of our air express capabilities in Hong Kong since 2002. The latest agreement with Cathay Pacific would allow it to reach greater heights as we consolidate our operations for maximal efficiency and availability," he said.
Rupert Hogg, CEO of Cathay Pacific said, "Air Hong Kong is a joint venture between Cathay Pacific and DHL, which has proven extremely valuable to both our businesses and we expect it to yield even better results and operational agility in its newest iteration. With Air Hong Kong becoming a wholly-owned subsidiary of our group, and with the block space agreement in place, it will enable us to invest in the long-term success of Air Hong Kong, which will benefit from the prospering express air cargo market in the region, and capture its abundant business opportunities."
"The new block space agreement reinforces the longstanding collaboration between DHL Express and Air Hong Kong as we gear up for ongoing growth in Asia Pacific trade, guaranteeing capacity on many of our critical routes that use Hong Kong as a logistics hub," said Ken Lee, CEO of DHL Express Asia Pacific.
"With Hong Kong's merchandise exports between January and September 2017 growing by 8.5 percent compared to last year, we are keenly aware of the upward momentum that the region's trade lanes are facing. Our renewed partnership with Air Hong Kong, combined with the new leaseback deal governing its fleet, gives us greater flexibility to add new routes and optimise our aircraft utilisation in the face of unpredictable changes or sudden increases in demand,” he said.
DHL Express has also announced recently on its expansion of Central Asia Hub in Hong Kong—a dedicated and purpose-built air express cargo facility at the Hong Kong International Airport which services over 800 flights daily.
The expansion is further expected to add an additional 8,000sqm of space, as well as new technologies, including automated X-ray inspection machines and material handling systems.