Yuantong to build airline

Shanghai Yuantong Express Co confirmed Wednesday a plan to build its own airline to meet rising demand for expedited delivery, after the China Air Transport Association (CATA) banned the firm's Shanghai unit from sending cargoes by plane after a battery fire accident.

"We plan to invest over 5 billion yuan ($802 million) to build an airfreight base in Hangzhou, Zhejiang Province," a Yuantong Express senior manager surnamed Wang told the Global Times Wednesday. "In the coming 10 years, we will have over 20 airplanes of our own."

The company was applying to the Civil Aviation Administration of China for approval to set up its own airline, according to Wang.

But Wang denied the plan has anything to do with the CATA penalty. CATA announced on November 19 that Yuantong Express' Shanghai unit had lost its second-class air cargo agent qualification by delivering lithium batteries against regulations.

"We formed our airfreight plan long before the penalty," Wang said. "The airfreight strategy is to meet a surging demand for speedy deliveries amid the rapid pace of life."

The express business has surged over the past two years, with daily deliveries hitting over 18 million units on average this year from 10 million units in 2010, the People's Daily reported Wednesday.

Yuantong's peak daily package delivery hit 7 million units this month, double the amount last year, The Economic Herald reported Tuesday. Behind the rapid expansion of business, management loopholes also surfaced, the report said.

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