For decades, Hawaii’s been renowned worldwide for its booming tourism sector. But certain aviation insiders hope to add another merit to the nation’s service repertoire: its airfreight operations. Johnny Hobayan, Aloha Air Cargo’s new vice president of sales and marketing, recently sat down with Air Cargo World to discuss Hawaii’s air cargo sector.
1. How does Hawaii fit into the international airfreight market?
Hawaii plays a unique and highly specialized role in the global airfreight market. Our geographic proximity to the South Pacific and Asian markets makes it a natural conduit for U.S. trade relations with these regions. We are historically an import-heavy consumables market, with close to 80 percent of our consumable goods being brought in from offshore. The remainder of the inbound capacity is filled with passengers feeding our tourism-driven economy or freight to be forwarded on lending to Hawaii, serving as somewhat of a pseudo cross-dock facility.
Hawaii’s role in the global airfreight market is evolving. With the eminent military build-up in Guam and changes in our fishing and agriculture landscape, we must adjust to accommodate the opportunities and losses accordingly. What’s more, Hawaii ranked 44th among the U.S. states in GDP growth in 2010, reinforcing our need to find and engage alternative revenue streams by means of exports.
2. How can you expand Aloha Air Cargo’s business in your new role?
When you look at our customers’ supply chains, it is very apparent that Aloha Air Cargo contributes value to only a small and very specific component of their entire value chain. Understanding this has allowed us to begin exploring further expansion into our customers’ logistics networks to include aircraft maintenance, multimodal transportation solutions, inventory management and off-island logistics services.
During the fourth quarter of 2010, we aligned our mission statement to communicate Aloha Air Cargo’s responsibility to facilitate the growth of Hawaiian commerce worldwide. To support this mission, we are actively aiding our customers to introduce their products to new markets. Our interline program and partnerships have allowed Aloha Air Cargo to effectively begin this process and now serves as one of our fastest-growing business lines. We will continue to expand our reach outside of Hawaii through existing and new partnerships.
3. How has 2011 been so far for your company?
The first half of 2011 has marked a pivotal point in Aloha Air Cargo’s history. We have effectively transitioned from the remnants of Aloha Airlines to the leader in Hawaii’s airfreight industry. Recently purchased SAAB aircraft offer flexibility to our freight network that will allow Aloha to realize efficiencies and engage markets previously outside of our capabilities. And we are poised for growth — inside and outside of Hawaii’s borders — with a broader product portfolio and ever-increasing network efficiencies.
4. What are some challenges affecting the global airfreight market? How is Aloha Air Cargo working to overcome them?
The most obvious challenge affecting our industry is the volatility in fuel costs, but this is only one of several factors forcing businesses and consumers alike to reconsider their mode and frequency of transportation. Given the cost disparity, airfreight has lost ground to surface movements. Global economic uncertainty has shaken consumer confidence and thus slowed movement on purchases, construction, etc., reducing the need for airfreight services. I think that the recovery period will take us well past 2012 and may get worse before it gets better.
With all of these factors adding to the challenges of our industry, Aloha Air Cargo has begun to look at alternative revenue streams to subsidize the volume reductions we’ve seen. In addition to revenue stream generation, we have acquired a new, more fuel efficient, addition to our fleet in the form of the turbo-prop aircraft, the SAAB 340A. The SAAB offers a flexibility to our freight network that will allow Aloha to realize efficiencies and engage markets previously outside of our capabilities.
5. Are there any changes on the horizon for Aloha Air Cargo?
Change has become the norm at Aloha Air Cargo. Re-fleeting, an expanded service portfolio, and U.S. and global expansion will come to fruition in the near future.