China Southern Airlines has ordered six B777Fs in a move to bolster its share of the burgeoning Pearl River Delta freight market, which has been aggressively targeted by Hong Kong and Shenzhen-based carriers.

China Southern is the only one of the "big three" Chinese carriers that does not have a JV cargo subsidiary and currently operates just two B747-400Fs. Foreign JVs have been on the rise in China as a way of quickly building up capacity and expertise to tap the fast-growing market, which has been growing by over 15% p/a - more than doubling from 4.5 million tonnes in 1997 to 9.9 million last year.

China's freight performance: Airports grouped by region: 1997 to 2005 (tonnes)

Source: Centre for Asia Pacific Aviation

In 2002 and 2004, cargo volume soared at China's airports by over 20%, following depressed years in 2000/01 and 2003, due to the global economic slowdown/9-11 and SARS, respectively. China had four airports on the ACI Global Freight Top 30 in 2005, led by Hong Kong International Airport handling 3.4 million tonnes (or one third of China's total), up 10.1% year-on-year. But year-on-year growth was stronger on the Mainland, led by Guangzhou in the ACI Top 30 (750,552 tonnes, +18.7%), Beijing (782,066 tonnes, +17.0%) and Shanghai Pudong (1.9 million tonnes, +13.7%).

But the influx of new capacity is affecting cargo rates, particularly in highly competitive markets like Shanghai, and remains the key challenge going forward.