Aiming for stable growth rate

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With new records and more than 1000 tonnes of freight handled in a single day, Munich Airport is solidifying its status as an engine of economic growth. Quick processes, rapid development and high capacity are features that make Munich Airport as an ideal cargo airport. Michael Kerkloh, president and chief executive officer of Munich Airport has been heading the change that is happening at the airport for the past 12 years. Kerkloh talks to Reji John about what makes the airport a symbol of growth and the air cargo value proposition.

As a chief executive how do you look at the cargo division and what is its significance in the overall airport business? Cargo is always an important business to have and we have built significant facilities for cargo at the airport. At the moment cargo is booming for us. It is always an indicator of economic development. However, there is a structural meaning to that. The airport, passenger wise, will cross the 14 million mark this year. And it is also due to the fact that there is a significant increase in long haul operations. Air cargo generally is long haul business. So when there is an increase in number of long haul flights there is an increase in capacity as well. I think the significant message to the cargo market is that Munich is an important cargo hub. We know that it is dependent on forwarders and consolidators and they recognise the importance. In the end, look at the location of the airport. It is located in the south of Germany, which is the industrial powerhouse. So there is no need to shift air cargo to Amsterdam or Luxemburg, when you have the opportunity to move them from Munich.

Are airports CEOs beginning to look at cargo operations in the same way as they look at passenger operations? I think the key is that we develop our long haul network and our cargo holding network. We focus not only on the airlines, but we have to focus on the whole value chain, the whole logistics chain. And very important in that chain are the forwarders. We also want to send out the message that we have managed to offer stable development and offer stable growth rate. We don’t have 20 percent in one year and minus ten percent in the following year. Therefore, the focus is on stable development, stable growth, and stronger relationships.

What are some of the factors that are supporting such stable growth? One is offer more capacity and more destinations. This year we have direct access to the Iran market, which is also an important market for Germany. Stable development and continuous growth. We will never reach the position of a Frankfurt or an Amsterdam. But we can do much more than what we are doing at the moment. That is what we are busy with.

How do you assess the all cargo carrier versus the wide body passenger aircrafts? I would say that wide body is the bread and butter business. Forwarders in the air cargo industry can rely on them. Today the network focus is on the emerging markets like China, India, Mexico and some African economies. All cargo or cargo only carriers have to be much closer to the logistics chain and the success is dependent on many factors including infrastructure.

Your thoughts on the air cargo value proposition of 48-hours of delivery anywhere in the world. I think with digitalisation things are going to change. The most import challenge here is the documentary process, trucking of goods to airports, and, in the end, reliability of cargo airlines. When you ask an airport how fast you can deliver, the answer is, we can do it very fast. Airports play a minor part in this. Technically it is possible.

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