Release Date: 02 January 2008
Release ID: 967
Korean Air, the world’s largest commercial cargo carrier in terms of FTK (freight ton-kilometers) volume, is strengthening its position in the China market with the establishment of a new cargo terminal at the Tianjin Binhai International Airport through a joint venture with Sinotrans Air Transportation Development(“Sinotrans Air”), a specialized subsidiary of Sinotrans Ltd.(“Sinotrans”), China’s biggest logistics company.
“Establishing a joint venture company between the largest logistics companies in Korea and China is a significant milestone for the future development of both our organizations,” said Korean Air Chairman and CEO Yang Ho Cho at the signing ceremony held in Tianjin today. “Through consistent investment, we aim to further develop this successful partnership,” Cho added.
A total of US$43.85million will be invested for the new cargo terminal. Korean Air and Sinotrans Air will respectively hold a 47% and 20% stake in the joint venture. The rest will be held by Korea Airport Service (15%), Hanjin Transportation Co., Ltd. (10%), and Tianjin Dongfang Credit Investment Company Ltd. (8%).
The contract term is 20 years and is extendable upon termination, covering cargo ground handling and relevant ancillary business activities. As the largest stakeholder, Korean Air will hold management rights during the contract term, appointing the CEO and CFO positions.
This new terminal in the Tianjin area will become a strong foothold for Korean Air to advance in the Chinese air cargo market, in both transportation and ground services, enabling it to provide comprehensive air logistics services. The new terminal is located in one of the districts in Tianjin , collectively known as the Special Economic Zone, where experimental reforms are implemented.
In October 2006, Korean Air leased 128,000 m2 of real estate from the Tianjin Airport Authority. The cargo terminal will be completed in two phases. Following preparations in 2007, phase one construction will begin in 2008 and is expected to be completed within the second half of 2009. Korean Air currently owns and operates a total of 6 cargo terminals at Incheon, Gimpo, L.A., New York, Tokyo and Osaka airports.
Korean Air aims to use the Tianjin Cargo Terminal to maintain its leading position in the industry and is very confident that the company will benefit from the synergy arising from various aspects of its businesses.
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