By Manik Mehta, AJOT Jade Cargo, whose birth as a joint venture offspring of a marriage between Lufthansa Cargo and Shenzen Airline was hailed at one time as a “unique cooperation” in the cargo sector, has crashlanded, with the German cargo carrier saying that it is going to withdraw from the joint venture. Founded in 2004, Jade Cargo has had three major stakeholders: Lufthansa Cargo held a 25% stake, while the German Company for Investment and Development had 24% and China-based Shenzen Airlines the remaining 51%.. Carefully weighing his words, Garnadt confirmed in an interview with the American Journal of Transportation during a visit to Seoul, South Korea, that “we are looking for new investors and seeking resolution by the end of March 2012”. According to German financial sources, Jade Cargo will need “at least” 50 million euros which the majority stakeholder Shenzhen Airlines is not willing to raise. German analysts say that Shenzen’s parent company Air China has shown little interest in the cargo joint venture. The first major sign of the rupture, following a massive downturn in demand, came when the Jade Cargo freighter fleet was grounded during the Christmas holidays last year. Although the freighters did take off subsequently on an ad hoc basis, the flight schedule had remained unsteady and shaky, with cargo experts in Germany predicting the impending demise of the cargo joint venture. Lufthansa’s chief executive Christoph Franz had already renarked last fall that he coud not understand how Jade Cargo would make money in the long run. Finally, Lufthansa Cargo notified its customers that flights with Jade Cargo had been stopped. That, for many German analysts, signalled the end of Jade Cargo. The hopes pinned on the joint venture were highly exaggerated and unrealistic from the very beginning based on China’s gigantic size and its burgeoning import-export traffic. Lufthansa Cargo had hoped to carve out a “big slice” of this “gigantic cake”, as Frankfurt based analysts told the American Journal of Transportation. But there were also other things not in order with the Lufthansa-Shenzen offspring from the start. The joint venture took off, with considerable delay, in 2006. In the initial stages, the joint venture carrier did not even have the necessary aircraft or licensed pilots to man the aircraft. The biggest problem was, however, Jade’s liquidity status. The company could achieve only 20% of its targeted turnover. The debt level is said to have reached a three-digit million sum. In the final stage, before Lufthansa’s exit, the carrier did not have money to settle the carrier’s fuel bill. Germany’s air-cargo sector has built massive over-capacities. The joint venture had suffered from financing problems. Although figures have not been publicized, German analysts believe that Jade would need, at least, a financial shot of 50 million euros just to survive. This had been agreed upon between the three stake holders in spring last year. But Shenzen had consistently failed to make payment of its share. These woes were further compounded by the fact that a weak market in China was affecting Jade Cargo’s business. Of late, China’s boom has lost much of its shine. Experts have also warned about a difficult year in 2012. Besides, there have been massive excessive capacities in the air-cargo sector. Over the years, several foreign airlines had created capacities for the Chinese market—they had all wanted to profit from the booming industry. Added to this were the freighters of the Chinese airlines. The result was that the cargo rates plummeted.