Lise-Marie Turpin: Challenge meets opportunity
Assuming a new position in favorable economic times can be challenging, but starting a job at the brink of a global recession is entirely more taxing. Lise-Marie Turpin has experienced this difficult reality first hand.
Although Turpin joined Air Canada during the prolific mid-’90s after various stints with Air France, she didn’t assume her current role as managing director of Air Canada Cargo until 2008. She took over within weeks of the stock market collapse. Fortunately, Turpin says she had been accustomed to the cargo industry’s volatility from her past experiences.
“Since I had already worked on the cargo side before, it wasn’t exactly anything new,” she says. “I just had to make sure that everyone on the team understood that we were in a
down cycle and needed to make good use of that time to build a more solid base.” Turpin adds that the difficult year also provided her team with time to strategize. Business had slowed, so the group looked to maximize its product offerings to get ready for the uptick in business that followed the downturn.
Like many airlines, Air Canada’s passenger side receives much of the attention. Turpin says the carrier is known primarily as a passenger airline, but argues that airfreight is a key piece of the corporate puzzle. “Cargo contribution is critical to the profitability of most routes,” she explains. “Because of that, the airline sees cargo as a valuable part of the business.” The cargo part of the business has taken numerous hits lately. She points to the financial crises in the U.S. and the eurozone as driving up fuel prices and affecting trade volumes. Not that Air Canada Cargo isn’t able to withstand such challenges, Turpin says. “We’re watching what’s happening around the world,” she says, “but we still have to make sure that, regardless of what’s going on, we’re able to keep a step ahead and still deliver the results that our customers expect from us.”
The March tsunami and earthquake in Japan also slowed airfreight operations. In addition to rerouting their fleets, Air Canada Cargo reduced capacity to compensate for the weak export volumes out of the Asia-Pacific, Turpin reveals. “The events in Japan certainly threw all of us a curveball,” she says. “Our routes quickly resumed back to normal, though.” Unfortunately, the global airfreight sector hasn’t bounced back quite as fast, and Turpin characterizes 2011 as a year “where everything cooled down.” Although global passenger volumes haven’t softened as much as airfreight, Turpin expects them to be impacted. After all, she maintains, air cargo activity is considered to be an early indicator of economic health.
Turpin knows that 2012 could be equally challenging, but she’s already anticipating the tough choices ahead. Key to guiding Air Canada Cargo down a tough road will be determining which actions the carrier must take to maintain its market share and developing technologies to streamline its customer service operations, Turpin says. For example, the carrier will be relying on its cool-chain offerings to attract new business. Last year, Air Canada Cargo rolled out its AC Absolute and AC Pharmacair solutions, which built off the success of its AC Cool temperature-controlled service. Turpin also expects a new tool that provides real-time information for the dispatch of line-haul activities to improve efficiencies in the operation.
Either way, Turpin promises to be Air Canada Cargo’s strongest advocate amid the economic turmoil. And if her experience taking over as managing director during a global recession is any indication of what’s to come, she’s up for the challenge.
Neel Shah: Striving for cargo equality
Neel Shah always has a seat at the main table. As senior vice president and chief cargo officer at Delta Air Lines, Shah says he is on the same level as Delta’s passenger executives. This ensures that cargo is considered in every aspect of the carrier’s day-to-day business, which also means that freight can easily influence routes and aircraft type.
“There are some routes we’re flying just because of cargo. We fly from LA to Sydney because we make a lot of money on cargo. It’s one of several examples where cargo makes the difference in us being able to offer or not offer that route as an airline,” he says.
Shah has worked hard to get on equal footing with his passenger brethren. When he jointed Delta in 2008, the reporting structure for cargo was different, and passenger services were the main driving force at the carrier. Chief cargo officer wasn’t even a position. Now, Shah reports to the president of the company, and while he admits some decisions still don’t work out for cargo, much of the talk centers around how passenger and cargo services can drive revenue as partners.
“At a lot of carriers, the passenger guys are just like, ‘Ah, the cargo thing; I’ll make an assumption, and we’ll just go from there,’” he says. “That’s absolutely the way it used to be at Delta, and now we’re equals.”
Statistics for the last few months of 2011 are depressing: no peak season in Asia coupled with rampant capacity growth in the area, a reeling Japanese industry still recovering from natural disasters, and ever-climbing oil prices. But Delta’s strategy of equality seems to be working well, as Shah says the cargo department keeps stealing bits of market share, even in these tough times. He says that in September, volumes were up 8 percent to 10 percent, year to date, and revenue had risen by 23 percent.
Much of this increase, Shah says, is due to a push toward premium products. “We’ve seen a steady increase there, and next year we’re trying to position ourselves so that we continue to sell more and more premium products,” he says. “We’re trying to do, let’s say, six or seven products, but do them well, and you won’t see us expand well beyond that. I frankly don’t feel there’s a market for it.”
This summer, the opening of a new international terminal at Hartsfield-Jackson Atlanta International Airport will only help Delta achieve better numbers. One aspect of the new terminal that Shah is especially thrilled to discuss is the inclusion of coolers in the development. This will enable handlers to wheel temperature-sensitive freight off the plane and directly into a cool environment. According to Shah, two large perishable shippers based in Los Angeles have already been through to tour the new facility.
Even with these improvements, Shah knows that 2012 will be no economic cakewalk. On top of the sour economy, Shah is looking out for a challenge that will affect everyone at Delta. The European Union’s emissions trading scheme, which is to be applied to airlines starting in January, is currently a large thundercloud on the horizon. “It’s just goofy, and the fact that people want to continue to beat up an industry that barely produces positive margins on a year-over-year basis just boggles my mind,” he says. “Air travel is shut down and the world goes into chaos. Why do we get the brunt of everything?”
While there is a bit of uncertainty moving into the new year, Shah knows that at Delta, the air cargo business has a strong voice and will be able to help create effective solutions to new challenges.