DHL extends its partnership with Air Hong Kong till 2033

December 14, 2017: The global express service provider, DHL Express, has extended its partnership with Air Hong Kong Limited with a new 15-year block-space agreement. The new deal will enable the carrier's overnight air services to continue supporting the DHL Express network until 2033. The new agreement will be valid from January 1, 2019, replacing Air Hong Kong's current contract with DHL when it expires.

As part of the new commercial arrangements, DHL will sell its 40 percent stake in Air Hong Kong to majority-owner Cathay Pacific and purchase eight of Air Hong Kong's A300-600F cargo planes which will then be leased back to the carrier. The new arrangement will provide a stable revenue stream to Air Hong Kong, and a predictable cost base for DHL states a release from the company.

The new agreement will initially provide DHL with the same service and access to Air Hong Kong's capacity as per the current agreement but allows for higher growth and flexibility in aircraft deployment and route selection to support DHL's express services in the Asia Pacific region.

"Asia is expected to experience exponential trade growth, and our renewed block space agreement with Air Hong Kong forms a natural complement to DHL's broader growth strategy in the Asia Pacific to meet continued strong market demand," said Ken Allen, CEO, DHL Express.

Cathay Pacific chief executive officer Rupert Hogg said, " With Air Hong Kong becoming a wholly-owned subsidiary of our group, and with the block space agreement in place, will enable us to invest in the long-term success of Air Hong Kong, which benefits from the prospering express air cargo market in the region. And will capture the abundant business opportunities that are prevalent."

Air Hong Kong remains an essential partner in DHL's Asia Air Network that utilises more than 800 daily flights to the United States, Europe and around the Asia Pacific region.

"Our renewed partnership with Air Hong Kong, combined with the new leaseback deal governing its fleet, gives us greater flexibility to add new routes and optimise our aircraft utilisation in the face of unpredictable changes or sudden increases in demand," said Ken Lee, CEO, DHL Express Asia Pacific.

DHL Express recently also announced the expansion of its Central Asia Hub in Hong Kong, a dedicated and purpose-built air express cargo facility at the Hong Kong International Airport which services over 800 flights daily. The expansion will add an additional 8,000sqm of space as well as new technologies including automated X-ray inspection machines and material handling systems. The Central Asia Hub has seen shipping volumes grow 12 percent year-on-year for the past decade and already handles more than 40 percent of all DHL shipments in the Asia Pacific.