Jade Cargo International, a joint venture between Lufthansa Cargo and Shenzhen Airlines, is grounding its fleet of six 747-400s because of weak demand.
In a statement, the airline called the action a temporary suspension and in its Web site last week the Shenzhen-based company did not disclose a reinstatement date. Asia air freight traffic, particularly shipments to and from Europe, has plummeted in recent months, sharply outpacing carriers’ removal of capacity.
Jade Cargo’s suspension of service will "also provide the shareholders with an opportunity to coordinate with stakeholders to continue with the restructuring of the company’s financial structure,” the company wrote on its Web site.
Lufthansa Cargo, which owns 25 percent of the carrier, said last month it was reviewing its investment in the venture and is considering a reduction of operations in China. Lufthansa CEO Karl Ulrich Garnadt said the German carrier has long known than Jade, established in 2006, was undercapitalized and is in “very constructive” negotiations with the Bank of China.
Shenzhen Airlines owns 51 percent of Jade Cargo, with German development finance institute DEG-Deutsche Investitions owning the remaining 24 percent.