China Postal Airlines, which provides the Express Mail Service (EMS) in China, ordered five Boeing B737-300 cargo planes from PEMCO Aviation Group, National Business Daily reported Thursday.
Earlier this year, China Postal Airlines ordered five Boeing aircraft from Shandong Aviation Group in April, and signed a contract with Air China Cargo Company Ltd in August to obtain four B757 chartered air freighters, the report said.
"The five Boeing aircraft purchased from Shandong Aviation Group will be delivered to China Postal Airlines this year or next year so EMS will have at least 26 cargo planes in 2014," an unnamed staff at China Postal Airlines was cited by the report as saying.
Experts believe that the new freighter order made by China Postal Airlines indicates fierce competition in the air express delivery sector, the report said.
The order is a part of the company's long-term strategy rather than a decision made under current competitive pressure because it takes a long time from making an order to finally receiving the freighters, Xu Yong, chief advisor of China express consulting website cecss.com, told the Global Times Thursday, noting that this order may have been made three to five years ago.
S.F. Express Co, a private Chinese express delivery firm and a major competitor of China Postal Airlines, has 30 cargo aircraft in total, including 12 wholly owned and 18 chartered, Chen Huan, public relations manager of S.F. Express, told the Global Times Thursday.
S.F. Express also has a plan to develop its airfreight capability but Chen refused to give details about the plan. Chen said that S.F. Express will continue to improve its core competencies.
Air express delivery requires large capital and highly professional staff so it is an important indicator of express delivery firms' capabilities, Xu said.
In the next 10 years, China Postal Airlines will have 90 planes and 52 navigable stops, according to a middle- and long-term development strategy cited by the report.
Citing American cargo delivery giants UPS and FedEx which together have about 1,200 freight aircraft, Xu said that considering China's fast development and its large population, air express delivery will be a growing field in the express delivery business in China.
However, the currently sluggish economy may restrict the development of express delivery firms, especially privately owned ones, experts said.
Xu echoed that the express delivery industry is highly dependent on the macro economy due to it being a downstream industry.
Another potential obstacle for the express delivery industry is that it is difficult to benefit from e-commerce, even though it is booming, because most of the express services for e-commerce in China are low-end and are locked in a vicious price competition, Xu said.