BEIJING/SYDNEY (Reuters) - A company controlled by the founder of China's e-commerce giant JD (NASDAQ:JD).com Inc has been granted approval to set up a new cargo airline based in the eastern province of Jiangsu, China's aviation regulator said on Tuesday.
Jiangsu Jingdong Cargo Airlines, with registered capital of 600 million yuan ($92.83 million), has obtained preliminary regulatory approvals to launch a new carrier, the Civil Aviation Administration of China said in a notice.
Suqian Jindong Zhanrui Enterprise Management, controlled by the JD.com founder Richard Liu, will contribute 75% of the founding capital while Airport Group in Nantong, a city in Jiangsu, will supply the rest, according to CAAC.
The airline is planning to use Boeing (NYSE:BA) 737-800 planes for its fleet, the CAAC added.
JD.com declined to comment beyond the CAAC statement.
JD Logistics, the logistics offshoot of JD.com, raised $3.16 billion in its initial public offering in May, the second largest IPO in Hong Kong in 2021.
The setup of a new cargo airline comes as JD.com's online shopping rival Alibaba (NYSE:BABA) Group Holding LTd has been expanding its fleet. YTO Cargo Airlines, owned by Alibaba-backed YTO Express, is introducing freighters converted from 767 and 777 planes.
Boeing, which has been struggling in China with sales of passenger planes due to trade tensions and the grounding of its 737 MAX, dominates the global freighter market. Air freight rates have skyrocketed, driven in part by a pandemic-induced expansion of online shopping.
($1 = 6.4635 Chinese yuan renminbi)