All-cargo business remains crucial

Though freighters may have a limited appeal in the air cargo market, yet many airlines continue to renew partnerships or buy more aircraft. Namrata More takes a look at the key developments taking place in the all-cargo business. It was recent news that Turkish Airlines’s cargo arm has signed a firm order for the purchase […]

All-cargo business remains crucial

Though freighters may have a limited appeal in the air cargo market, yet many airlines continue to renew partnerships or buy more aircraft. Namrata More takes a look at the key developments taking place in the all-cargo business.

It was recent news that Turkish Airlines’s cargo arm has signed a firm order for the purchase of four A330-200F aircraft. The airline believes that the additional aircraft will help to further boost the company’s expansion in the cargo market. Turkish Airlines already operates five A330-200F, and the additional order will enable them to quickly meet the “growing” cargo market demand.“The A330-200F freighter aircraft have demonstrated outstanding operational reliability and performance for our cargo transport operations. It is with this in mind that we chose to expand our freighter fleet with more A330-200F,” said Dr Temel Kotil, CEO of Turkish Airlines in a press statement.

Panalpina and Atlas Air also strengthened their long-standing partnership. With a five-year agreement in place, Panalpina will switch one of its wet-leased aircraft to more than 200 scheduled charters per year, further expanding its air freight network.“The switch from one of our wet-leased 747-8Fs to more than 200 scheduled full charters per year as part of this agreement equals a change in our procurement strategy and prepares the ground for the continued expansion of our controlled air freight network,” said Lucas Kuehner, global head of air freight at Panalpina.Panalpina is expanding its controlled air freight network by adding a full-freighter service to Brazil. As of March, Panalpina will not only operate scheduled charter flights from Hong Kong to Huntsville, but also from Huntsville to São Paulo. The extended service is part of the recently renewed long-term agreement with Atlas Air. The direct service from Huntsville to São Paulo, called Brazil Wings, has been specifically designed for customers in the Midwest and in parts of the Southeastern United States. The new service is tailored to companies that manufacture heavy machines and equipment for agriculture and mining. Brazil, with its large agricultural and mining industries, is an interesting market for these companies, but getting the goods there can be challenging. So far, the companies had to export via large, congested airports with limited freighter capacity.

Emirates SkyCargo, bolstered its operations on its African trade route network with the introduction of a weekly freighter service to Ouagadougou in Burkina Faso.The addition of a dedicated freighter service will be a boost to create more opportunities for importers and exporters across local markets. Via its advanced cargo handling and storage facilities at its hub in Dubai, Emirates SkyCargo anticipates transporting goods into Burkina Faso such as pharmaceuticals and electronics from cities as far as Mumbai and Guangzhou, and bringing local products and commodities such as mangoes and fresh beans from Burkina Faso to cities like Frankfurt and Dubai.
AirBridgeCargo Airlines (ABC) marked its 10th anniversary year in 2014 by carrying a record tonnage of 401,000 tonnes, a 17.6 percent increase year-on-year, with an average load of 72.6 percent.To meet increased demand for its capacity and services from international customers, ABC supported its growth with further investment to upgrade its freighter fleet. To provide clients with an enhanced service offering and more point-to-point deliveries within its network, the airline expanded its footprint on all of its existing markets. During the course of 2014, ABC launched new routes and added more services to its already well-established stations. Denis Ilin, executive president of AirBridgeCargo Airlines, said: “ABC has been able to grow consistently with a compound growth rate of 11 percent over the last five years. We have earned our customers’ trust by providing them with a reliable service, delivered by one of the youngest and most modern freighter fleets in the industry.”The all-cargo carrier’s main strategy in 2014 was to be able to respond quickly to market changes, while maintaining operational excellence for its customers, in particular through investing in improved processes at its main Moscow hub.

The carrier aims to further increase its network footprint by adding destinations to support smaller, niche or even short-term project business opportunities. “The geographic location of our hub in Moscow positions us perfectly to introduce services to literally any point in Europe and beyond. The global market will remain challenging in 2015 but I look forward with confidence that we will keep pace with the demand and opportunities that exist for us,” Ilin added.

This April, Qatar Airways will launch its fourth freighter service in the US market to Los Angeles.The new addition will provide 100 tonnes of cargo capacity per flight. Qatar Airways uplifted over 49,000 tonnes of airfreight from the US market in 2014 and it will continue to be a key growth market for Qatar Airways Cargo, with the market predicted to add more than one million additional tonnes of freight before 2018.In 2014, over 100,000 tonnes of perishable products were exported by air from Los Angeles.

Amsterdam Airport Schiphol saw a massive 50 percent increase in freighter capacity from Nairobi, in the week running up to St. Valentine’s Day.The usual 30 flights had increased to 45, as the airport prepared to handle the annual influx of roses and other blooms from Kenya, before the flowers were re-exported to markets across Europe – primarily Germany, France and the UK.The volume of cut flowers passing through Schiphol also grew by 50 percent, compared to normal levels. Estimates place the week’s traffic at 70 million inbound stems; when added to the larger volume of flowers from Dutch growers, the outbound traffic by air and truck reached a total of 100 million red roses, 100 million red tulips, 100 million assorted other varieties, and 20 million pot plants.

Though competition isn’t getting any easier, airlines anticipate that there will be a general increase in demand. “Cost of fuel consumption is dropping, positively effecting worldwide economy growth, which most likely will result in an increase of air freight demand. Forecasts for even better economic and trade growth should lead to sustained air cargo traffic growth in 2015 and 2016,” said Eyal Zagagi, CEO, CAL Cargo Airlines. The Israel based airline is focused on “complicated cargo requests” with its fleet of 747-400F. However, various economic changes could impact the all-cargo business. “Euro vs. Dollar will have a big impact on competition on pricing,” says Zagagi of CAL Cargo Airlines. In the interim, demand may be only deciding factor for many cargo airlines.

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