Chairman & President, SF Airlines (also Vice President, SF Group), SF Airlines Company Limited
Li Sheng, Vice President, SF Group & Chairman, SF Airlines
Li Sheng, Vice President, SF Group & Chairman, SF Airlines speaks with Reji John, Editor of STAT Media Group, about the joint business agreement with Etihad Airways and explains the reasons for such a partnership and what it means to SF Airlines customers.
#aircargo #china #freighters #globaltrade #ecommerce #ai #technology #logistics #logistics #uae #abudhabi
00:00 - Introduction
01:03 - Key benefits of this agreement to SF Airlines customers
02:56 - Assessment of the capacity agreement
04:00 - Potential additional capacity
04:45 - Duration of this partnership
05:27 - Importance of this p...
About Li Sheng
Li Sheng, Vice President of SF Group and Chairman of SF Airlines, discussed the company's joint business agreement with Etihad Airways in an interview at Air Cargo Europe and Transport Logistic in Munich. He stated that the partnership helps SF Airlines expand its network into Europe, Africa, and the Middle East, complementing its existing coverage. Sheng described the agreement as a long-term, metal-neutral partnership that allows both carriers to serve clients with the same aircraft across different flights, optimizing capacity and traffic rights. Sheng also addressed SF Airlines' operations in India, noting that the carrier operates more than 20 flights per week to Delhi, Chennai, Mumbai, and Bangalore, and that India ranks second in capacity after domestic China. He expressed confidence in the company's fleet expansion plans, stating that SF Airlines aims to grow its freighter fleet to 100, 150, or even 200 aircraft, citing optimism about international economic growth and China's role in the global economy.
Transcript (19 segments)
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Interviewer0:26
Hello and welcome to Conversations. Conversations is an interview series that we record onsite in person from around the world with the air cargo and logistics leaders. This time we are coming from Air Cargo Europe and Transport Logistic in Munich, Germany. And with me in conversation today is Li Sheng, Vice President of SF Group and Chairman of SF Airlines. Li, welcome to the conversation series. Great to have you. Just want to ask you: how does this joint business agreement help SF Airlines and its customers?
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Li Sheng1:06
It has been 30 years since the founding of SF Group. Previously, SF mainly developed in domestic China, but in recent years, with the globalization pace of Chinese companies, to meet the demand of our clients and customers, we also expanded our business globally very quickly. Comparing with the global leaders, SF network could not fully cover Europe, Africa, and the Middle East. During this process, the partnership with Etihad helped us a lot. Etihad not only has their freighter network but also their belly capacity network, which brings very good coverage of most of the main destinations in Europe, Africa, and the Middle East. This is a great supplement and great opportunity for SF network and SF business. So the partnership we achieved today brings both parties very good connections and very good coverage to the global network. That's the reason we take this partnership very importantly, because it brings SF and our clients a very good opportunity to go global.
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Interviewer2:45
What is your assessment of the capacity agreement that SF Airlines signed with Etihad Airways in September 2024?
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Li Sheng2:56
The MOU signed in September 2024 is a great recognition of the partnership between SF and Etihad since 2023. We initiated our partnership with a capacity partnership in 2023, and in the middle of 2024, in September, we signed the MOU. It is a great recognition of the business potential and the effort from both parties. We made great effort to synergize both parties in operation, in particular to meet the demand from our clients. The MOU signed on September 24th is for the future and it's a recognition of the potential of the future partnership.
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Interviewer3:51
With this joint business agreement, how much additional cargo capacity is added to SF Airlines on an annual basis?
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Li Sheng4:02
From the very beginning two years ago, we only flew four flights per week for both sides, bringing a total capacity of 200 metric tons. But now we fly 10 flights per week in total, which means we have 1,000 metric tons per week. So you could say that our capacity has grown from the very first day to now, a four times growth rate.
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Interviewer4:34
Okay. Is this agreement for a long term, or is it for a specific period with the option to renew at the end of each agreement?
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Li Sheng4:47
Today we entered into our agreements for five years, but we foresee the long run. We are seeking a long-run partnership with Etihad, and this is constrained by technical challenges. So the first term is five years, but from a fairness perspective and from a capacity synergy perspective, we take Etihad as a long-term partner and we are signing a long-term partnership agreement with Etihad.
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Interviewer5:17
How important are metal-neutral partnerships to optimize your fleet in a highly volatile and uncertain world of global trade?
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Li Sheng5:33
Traditionally, SF Express Group is famous for our delivery network and express delivery business, and SF Airlines, as an arm of SF Express Group, mainly supports our express clients. But with the expansion of our global business and international business, we found that to have our metal, our aircraft, we will not only support the traditional express customers but also third-party business opportunities. This brings us a very important concept: metal neutrality. It is neutral for different partners and also neutral for SF and Etihad in this partnership. We could serve our clients with the same metal on different flights, and this concept could optimize the traffic rights, capacity synergy, etc., to better serve our clients.
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Interviewer6:43
Does this partnership also offer room for the two carriers to be innovative, to create very specific air logistics solutions for some of the high-yield cargo commodities, and perhaps create trade lanes to enhance the speed, reliability, and efficiencies for shippers in high-tech and pharmaceutical industries?
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Li Sheng7:13
The answer is yes. SF and Etihad attach great importance to high-value-added clients, like the pharmaceutical, semiconductor, and special cargo sectors. In this process, SF keeps improving our capability in special cargo. For example, SF secured the IATA CEIV Pharma certification in 2024, and likewise, Etihad also did a lot in such special cargo. With this partnership, it will bring both parties more incremental opportunities to expand such business, and we believe it will definitely bring us incremental business opportunities in the high-end and high-value-added clients like pharma and special cargo.
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Interviewer8:10
Is there a bigger focus for SF Airlines on more high-yield cargo, particularly given the massive demand and faster delivery for high-tech cargo, particularly semiconductor and other industry related to AI commodities for the AI industry?
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Li Sheng8:32
Definitely. Nowadays, AI-related cargo transportation demand grows very quickly. As an airline, like other airlines, we prefer and we do like to support these clients to transport such high-value cargo. Recently, the AI-related cargo transportation demand grows very quickly, especially in semiconductors. SF attaches great importance to this business, and this demand generates around China and the Greater Asia area. We believe with the partnership with Etihad, we shall definitely support our clients in this area and also bring our partnership more opportunities and return.
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Interviewer9:26
What is your plan for your freighter fleet, which is nearing 100 aircraft? Are you looking at adding more freighters to your fleet, and do you consider any of the new production freighters, either the A350F or the 777-8F, which may come in 2029?
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Li Sheng9:44
We are quite confident that SF will keep expanding our freighter fleet to 100, maybe 150, maybe even 200. This is because we are optimistic about international economic growth. Even though during such process there might be some fluctuations, in the long run we shall keep optimistic about the global economy, and we are confident about the role the Chinese economy plays in such process. Talking about the specific type of aircraft, A350 or 777, we have not selected any type yet, but I want to share that SF has already put into having incremental widebody and giant widebody freighters into our fleet on the calendar. We have already put such plan on the calendar, even though constrained by the supply chain, both Airbus and Boeing cannot deliver us the production freighters in the upcoming two or three years, but we have already put such plan on our calendar.
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Interviewer10:59
Just one question, since I'm coming from India: SF Airlines flies into India to some stations. Can you give an idea about how many stations you fly to and how regular your flights are into India?
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Li Sheng11:14
SF attaches great importance to the India market. We conduct more than 20 flights per week to India, to four main destinations: Delhi, Chennai, Mumbai, and Bangalore. Actually, from a capacity perspective, India ranks second place of our capacity besides domestic China. So India plays a very, very important role between China and India. Such change and such trend shows the very robust and very good economic growth in India and brings us lots of opportunities. This is a vivid demonstration of the great growth of the Indian economy.
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Interviewer12:06
Li, great to have you for this conversation. Thank you so much. Thank you so much.