China Southern Airlines has postponed plans to form a cargo joint venture with strategic foreign partners until later this year.

The company said yesterday that talks with potential partners, like Air France-KLM, have stalled.

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"We had planned to finish the deal at the end of last year, but problems in negotiations slowed down the process," said Xu Jiebo, vice president and chief finance officer with China Southern, the nation's biggest carrier by fleet size.

Declining to elaborate on the problems, he said the cargo joint venture is expected to be set up within this year.

"We are still in talks with Air France-KLM and other members in Skyteam alliance," Xu said after a press conference launching co-branded credit card with China Merchants Bank.

"China Southern will take a controlling stake in the cargo joint venture which will be either based in Guangzhou or Shenzhen."

He also said that location of the base airport is a hot topic.

China Southern, which will be an official Skyteam member this year, is the only one of the country's three biggest airlines that doesn't have an independent cargo venture.

Through partnerships with foreign giants like Air France-KLM, China Southern can benefit from their strong overseas networks to ensure full return flights, Xu said.

The General Administration of Civil Aviation, the industry watchdog, expects cargo traffic in China to double within five years.

The fast-expanding air freight market, driven by the nation's trade momentum, has attracted foreign carriers.

Lufthansa German Airlines has partnered with Shenzhen Airlines to set up Jade Cargo International Airlines, which has been operating since last year.

Great Wall Airlines, a joint venture between Singapore Airlines Cargo, and China Great Wall Industrial Group, also made its maiden flight last year.

Korean Air Lines is also seeking partnership with Tianjin-based Okay Airways.

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