MAHB, Henan province airport sign MOU to boost Malaysia-China air cargo connectivity

June 12 2024 Print This Article

Malaysia Airports Holdings Berhad (MAHB) has signed a Memorandum of Understanding (MoU) with China Henan Aviation Group Co., Ltd (CHAGC) aimed at boosting air cargo connectivity and logistics between Malaysia and China. The collaboration was commemorated in a document exchange ceremony witnessed by the Minister of Transport Malaysia, Loke Siew Fook and the Executive Vice Governor of Henan Province, Sun Shougang on 8 June 2024 at Crowne Plaza Hotel, Zhengzhou, Henan Province, China.

This strategic partnership, which is in conjunction with the 50th anniversary of Malaysia-China diplomatic relations, will also solidify Malaysia’s position as a key player in global trade. It will enhance the efficiency and reach of both airport operator groups by establishing new air cargo routes between Zhengzhou Xinzheng International Airport (CGO) and KL International Airport (KUL); creating routes linking Europe with Malaysia; and strengthening KUL as a regional logistics hub. The partnership will also focus on expanding the infrastructure needed to support transshipment and re-export activities. By leveraging CHAGC’s expertise, this collaboration will enhance KUL’s cargo capabilities, bringing substantial benefits to both nations and the broader ASEAN region.

The Minister of Transport Malaysia, Loke Siew Fook said, “China has been one of Malaysia’s largest trading partners. In 2022, the value of trade between our two countries was 17.1% of Malaysia’s total global trade worth of RM2.8 trillion. Last year, our mutual commitment was reaffirmed during the Malaysia-China Business Forum, with the announcement of RM170 billion in investments from China - a testament to the confidence of Chinese investors in Malaysia. This latest collaboration between MAHB and CHAGC further reinforces the joint commitment to enhancing cooperation and fostering mutual prosperity between our two nations.”

CHAGC currently manages CGO, one of China’s leading air cargo hubs, and also has a global presence with cargo terminal projects in Budapest Ferenc Liszt International Airport (BUD) and Leipzig/Halle Airport (LEJ). CHAGC plans to expand its overseas projects in Asia, and particularly in Malaysia, it is exploring the establishment of an air cargo hub to complement China’s Belt and Road Initiative, thus enhancing air connectivity between the regions.

Commenting on the partnership, MAHB Acting Group Chief Executive Officer (CEO) Mohamed Rastam Shahrom said, "This MoU with CHAGC underscores our commitment to enhancing Malaysia’s position in global trade. By expanding our air cargo connectivity and logistics capabilities, we are also creating new opportunities for economic growth and development in the region."

MAHB has been actively expanding the KUL cargo facilities in line with its KLIA Aeropolis Master Plan. The master plan is closely aligned with Malaysia’s National Transport Policy 2019-2030 and the New Industrial Master Plan 2030, aimed at driving the nation’s industrial growth and transport efficiency.

KUL currently handles 21 scheduled freighters transporting cargo to and from 40 countries, hosting over 200 third-party logistics providers and freight forwarding agents. In 2023, KUL registered approximately 700,000 metric tonnes of cargo movements. 

Successful developments under the master plan include the conversion of the former LCCT into KLIA Air Cargo Terminal 1 (KACT1) in 2017, thus increasing the total capacity of KUL’s cargo terminal space to 2 million sqft. In 2020, the Cainiao Aeropolis eWTP Hub was completed, providing 1 million sqft of Regional Distribution Centre (RDC) space through a collaboration with Alibaba's logistics arm, Cainiao. Earlier this year, DHL Express operationalised their state-of-the-art, fully automated sorting facility with a capacity of 10,000 parcels per hour.

Moving forward, MAHB plans to accelerate growth at KUL with the first phase of Aeropolis Industrial Park, covering 200 acres and focusing on air-centric, high-value sectors and components such as aerospace, electronics and electrical (E&E), as well as halal and cold chain logistics.

This latest partnership with CHAGC will enhance air cargo connectivity and leverage on both entities’ strengths to create a more robust logistics network between Malaysia, China, and beyond. Direct air routes from CGO to KUL will be expanded with Raya Airways operating thrice weekly cargo flights, with the commencement expected in August 2024. Additionally, China Southern will be servicing seven commercial flights weekly starting on 21 June 2024.