Aviation fuel provider to step up global partnerships

China National Aviation Fuel Group Ltd (CNAF), the country's largest aviation fuel supplier by sales revenue, plans to invest in equipment manufacturing and innovation in economies related to the Belt and Road Initiative over the next several years to expand its global presence, said its top executive.

Beijing-based CNAF plans to further diversify its sales channels and enhance its production and service networks to develop both domestic and overseas markets.

Chairman Zhou Qiang said the group will accelerate reform of its overseas business management system and mechanism, adjust business structure and optimize its business model to push this strategy. It is a practical move for the company to enlarge its sales network to supply more of China's aviation fuel to airlines across the world, Zhou said.

Under its plan, the centrally administrated State-owned enterprise will better use the strategic platform functions of its Singapore branch－China Aviation Oil (Singapore) Corp, the largest physical jet fuel trader in the Asia-Pacific region and the key supplier of imported jet fuel to China's civil aviation industry－to efficiently coordinate overseas resources to compete with other established foreign rivals.

The company is willing to form industrial alliances with Chinese SOEs and private companies to improve its strength abroad and minimize operational risks, Zhou said.

CNAF provided 5.31 million metric tons of aviation fuel to 730,700 flights between Jan 24 and May 21 to support the country's fight against the COVID-19 pandemic. The company also supplied 108,545 tons of aviation fuel to aircraft carrying medical teams, supplies and nonmedical personnel for emergency response activities throughout China.

During this period, the group provided 62,589 tons of aircraft fuel for air cargo, civil aviation and air transport services amid the pandemic fight in Central China's Hubei province.

Though the unexpected contagion has forced many airlines to either cut or suspend services over the past three months, and falling oil prices have also brought challenges to the company's business growth, CNAF managed to provide 24-hour supply services of aviation fuel to more than 230 airports in China to ensure safe and smooth operations during the country's contagion prevention and control campaign.

In addition to seeking new growth points overseas, he believes the fast-growing general aviation sector will be key in helping drive the nation's aviation fuel consumption as China has secured major progress in the general aviation industry in terms of surging flight hours and more certified general airports serving the sector. General airports provide services other than passenger, cargo and mail transport.

"CNAF is keen to set up a cross-sector partnership network that will eventually grow into an ecosystem connecting local governments, airports and general aviation companies," Zhou said.

As of the end of 2019, China had 246 certified general airports. This was the first time for China to see more general airports than civil airports, the latter of which mainly serve the civil aviation transport of both passengers and air cargo, according to the Civil Aviation Administration of China.

Backed by the 246 general airports, the annual total flight hours of China's general aviation industry reached 1.12 million hours in 2019, up 13.8-percent on a yearly basis.

The general aviation sector has huge potential to generate fresh momentum in upholding China's economic and social progress. It will serve diversified commercial uses including emergency medical care services, forest firefighting missions, power-line air patrols and emergency supply deliveries, said Zhang Yongjun, a researcher at the Beijing-based China Center for International Economic Exchanges.

As China has listed the general aviation industry as a strategic emerging industry, more airports are under construction and will be equipped with the latest digital solutions.

Supported by more than 13,000 employees, CNAF holds shares in 20 domestic and overseas companies and runs an intensive sales network, logistics and distribution system for aviation fuel, refined oil products and petrochemicals globally.

The Chinese firm currently offers wholesale, retail, storage and distribution of gasoline, diesel and petrochemical products in 23 provinces, autonomous regions and municipalities in China. It runs large-scale logistics and warehouse bases for refined oil products and petrochemicals in the Yangtze River Delta region, the Pearl River Delta region, the Bohai Bay area and in Southwest China.