China Southern Airlines, the largest airline by fleet size in the country, said it will delay commencement of freight operations in Vietnam, mainly due to the exchange rate.

Although it has maintained a 10% annual growth in the passenger market on Southeast Asian routes, China Southern Airlines has decided to postpone the launch of cargo flights from Vietnam to Europe and the U.S. because of the continuing depreciation of the Vietnam Dong against the U.S. dollar and the appreciation of RMB against the U.S. dollar. 

Another reason to postpone the launch of freight business is high prices of aviation fuel in Vietnam; a ton of fuel costs RMB 2000 to RMB 3000 more than that in Guangzhou.

China Southern Airlines operates a fleet of 332 aircraft, providing passenger, cargo and mail transportation services in the People's Republic of China, Hong Kong and Macau, as well as other parts of the world.

Earlier this week, China Southern has sought permission of the National Development and Reform Commission (NDRC) for raising fuel surcharge to offset the rising prices of jet fuel.