US-based Air Transport Services Group (ATSG) has confirmed it has suspended plans to enter the Chinese market via BrightStar Express Airlines (Tianjin), a yet-to-be-certified start-up cargo carrier whose other equity shareholders include Okay Airways (BK, Tianjin), Vipshop Holdings, an online discount retailer for brands in China, and several smaller Chinese firms.
During a recent earnings call, Chief Operations Officer (COO) Rich Corrado said that aside from the numerous regulatory delays BrightStar has faced in China over the course of 2016/17, ATSG has also come across other lucrative opportunities in the Chinese market albeit with existing Chinese operators. This, in turn, had led the firm to re-evaluate its entire Chinese market strategy.
"When you look at our strategy as it relates to Pemco [ATSG's P2F conversion subsidiary] and the Chinese conversions, it’s really provided us with some new relationships with some existing airlines within China that are opening up some strategic opportunities on a number of different fronts across our portfolio of companies that we are looking to hopefully build on from there," he said.
"So it didn’t seem to be wise, if you will, to continue starting a brand-new airline in China given some of the headwinds that we were facing and some of the significant opportunities that are already existing with existing potential partners."
According to chief executive Joe Hete, ATSG's main reason for participating in BrightStar was to be able to provide the carrier with leased capacity on a preferrential basis.
"At the end of the day, it was really more about deploying capital through leasing of aircraft into the Chinese market, but you don’t have to have a JV structure to do that," he added.
It is recalled that Cargolux (CV, Luxembourg) has faced similar delays in the launch of its Henan Cargo Airlines (Zhengzhou) joint-venture with Henan Civil Aviation and Investment Co. (HNCA), Henan Airport Group, and Xinggang Investment Group.
As recently reported, Cargolux CEO Richard Forson confirmed to The Loadstar that pending the resolution of various outstanding regulatory requirements, the start-up may only launch flights during the second half of next year.
