By Lu Haoting (China Daily)
Updated: 2008-02-29 10:08

A joint venture between Korean Air and Sinotrans Air Transportation Development Co Ltd is expected to launch services in the first half to cash in on China's fast-growing cargo market.

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The joint venture, Grand Star, will be based at Tianjin Binhai International Airport, said Kim Dae-heui, Korean Air's general manager for cargo in China.

Korean Air, the world's largest commercial cargo airline, first announced plans in 2006 to set up a cargo joint venture with Sinotrans Air, a subsidiary of Sinotrans Ltd, China's biggest logistics company.

The cargo joint venture has registered capital of $65 million, with Sinotrans Air controlling a 51 percent stake and Korean Air holding 25 percent. The remainder is held by two South Korean investment companies - Hana Capital and Shinhan Capital.

Route network details for Grand Star are not yet available.

"Sinotrans Air's domestic network and Korean Air's extensive international network will be complementary," said Kang Kyoo-won, Korean Air's managing vice-president for China.

The South Korean carrier's cargo business in China accounted for 25 percent of its total cargo revenue last year.

With annual growth of 17 percent in the past decade, China has become one of the world's fastest growing air cargo markets and a hot investment destination for international cargo carriers including Lufthansa Cargo, Singapore Airlines Cargo and Taiwan's China Airlines and Evergreen Group. Four cargo joint ventures are already operating on the mainland.