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Region Focus: Southeast Asia

By Hpanchal on June 30, 2011

Operators focus on intra-regional flows

The 747-400 freighter fleet of Singapore Airlines (SIA), a key plank of the carrier’s longhaul network, is showing up increasingly at airports around Asia.

SIA’s shifting focus from longhaul to intra-Asian routes reflects the rise in volumes moving within the region.  The carrier’s activity mirrors that of other airlines, which are increasingly investing in transshipment efforts.

In early April, Southeast Asia’s leading carrier added Penang, Malaysia, to its freighter network as a stop in a weekly 747-400F run from its home base to Hong Kong. This came just more than a week after the resumption of SIA freighter flights to Kolkata, India, which had been suspended in 2009. The weekly Kolkata freighter supplements the airline’s four weekly passenger services on the route.

SIA Cargo has recently established freighter links to Taipei, Taiwan; Bangkok and Osaka, Japan. Two flights a week operate on a Singapore-Bangkok-Tokyo route, and three others serve the Japanese capital over Taipei. In mid-May, a twice-weekly 747-400F service to Osaka began.

SIA’s freighter presence in Asia receieved a significant boost in June with the arrival of a 747-400BCF; a second plane will join the fleet in September.

“With the increase in our fleet size, we are planning more regional flights, such as the recent introduction of Osaka flights and increasing Shanghai flights,” according to a company spokesman. Taipei, Narita and Shanghai are possible destinations for the new freighters.

Another indication of the shift from longhaul flights is the decision of Air Hong Kong, the joint venture between DHL Express and Cathay Pacific, to take three 747-400BCFs from Cathay. These were then deployed on trunk routes in DHL’s regional network centered on Hong Kong, which has so far been served with A300-600 freighters. The first 747-400BCF went into action at the end of May on the Hong Kong-Singapore sector.

The pull of China is a major driver in this realignment, the SIA spokesman observes.

“The main export markets for Southeast Asia have so far been mainly the USA and Europe, with commodities like garments, shoes, electronics and hard-disk drives. However, with increasing trade between China and Southeast Asian countries — especially with Thailand, Vietnam, Cambodia and the Philippines — intra-Asia cargo movements are on the increase, especially with the migration of lower-end manufacturing from China to some of these countries,” he says. The spokesman adds that the base exports from Thailand are electronics and car parts to China and Japan, although perishable exports are on the rise. Exports coming from Thailand and Indonesia include seafood and fruit.

Like the airlines, forwarders are also stepping up their capabilities to serve intra-regional business. “Increased importance is being attached to the intra-Asia and transpacific trades,” declares a spokesperson for Kuehne + Nagel with regard to the company’s plans in the region for the next 18 months.

Dian Mulia Freightravel, one of Indonesia’s top-10 cargo agents, historically concentrated on longhaul traffic, with exports to Europe and North America dominated by garments, footwear and furniture. Electronics exports have boomed in the wake of the opening of factories in Indonesia for the likes of Panasonic and LG, Dian Mulia’s managing director, Franky Frans, says.

The company has recently concentrated on developing perishables traffic in response to a rising demand for Indonesian fruits and vegetables in markets like Thailand and Singapore. “This is high-yield cargo. It generates more revenue for us,” Frans says.
For all the emphasis on intra-Asian trade, Dian Mulia Freightravel has not turned its back on expanding overseas business. The forwarder is now in the early stage of developing traffic to South Africa and Latin America, Frans says.

Like SIA Cargo, MASkargo is also gearing up its freighter operations for more activities within the region. Its current lineup of six B747 freighters, which includes four leased 747-200Fs, will be changed to a mix of 747 and A330-200 all-cargo aircraft. Two A330Fs are scheduled for delivery in September, and MAS has two more of these aircraft on order. MASkargo management has indicated that the aircraft will be used chiefly on intra-Asian routes, especially to China.

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