Chinese logistics partnerships with Edmonton International Airport could be the key to more direct flights

Photo: Getty Images

On November 9, 2018, EHL International Logistics Co. (EHL) and Edmonton International Airport (EIA) inked a partnership agreement that announced the EIA would be the new North American logistics hub for the Chinese state-owned company, fielding all freight flights before they connect on to US destinations. The airport will now be home to the continent-wide consolidation centre for all goods, primarily agri-business, manufacturing and e-commerce, that will move between China and North America for EHL, a subsidiary of the Henan Bonded Group. EHL is based out of the City of Zhengzhou, the provincial capital of Henan, a province where over 70% of China’s perishable air cargo moves through, and located within two hours of one billion people. This news complements existing partnership with Air China Cargo, a company that has successfully serviced EIA for nearly three years, flying between Shanghai Pudong Airport, Chicago O’Hare International Airport and Tianjin Binhai International Airport, two times per week. Edmonton’s Air China Cargo service is the only Canadian destination with scheduled freighter service to mainland China. EIA has attracted many cargo services over the past few years, holding a Port Alberta designation as a Foreign Trade Zone, which allows companies to reduce or eliminate normal trade barriers such as tariffs, quotas and compliance costs.

I wrote an article last June 2017 entitled: The Economic Impact of Direct Flights, where I highlighted the importance of direct ingress and egress for any metropolitan city looking to grow its tourism and commerce on the world stage. I noted that while Edmonton successfully provides non-stop routes to winter holiday destinations, we are lagging in servicing global business centres across United States, Europe and Asia.

It’s clear to me that the continued forging of partnerships with Asian aviation companies can only lead to more positive opportunities on the passenger side for the Edmonton International Airport. In particular, the Chinese passenger airline industry is largely state-owned and operated, dominated by three airlines: Air China, China Southern Airlines and China Eastern Airlines (of which we already have a partnership with Air China Cargo).  There is limited competition from private operators in the commercial passenger market as the state owned operators have the political and financial wherewithal from the central government to lead the market (NY Times). With no direct flights from Edmonton to Asia at the current time, and witnessing these Chinese companies pledge their Canadian cargo hubs to Edmonton, I’m inclined to believe that the Chinese State sees Edmonton as a positive business environment. Since the Chinese state largely controls the growth plans for this industry, it is very reasonable to extrapolate that there is high potential for Edmonton-China passenger routes to follow. With the impressive growth of the Chinese air passenger industry from 2009 to 2017, increasing from 229 million to 551 million (more than 140%), Chinese travel demands will continue to put strains on existing passenger routes and hubs (World Bank). Fortunately, Edmonton has extensive capacity to grow and handle many of these demands, as a connector airport, or final destination.