While maintaining a reduced scheduled-service portfolio, a new ACMI and charter division has been created to find additional work for the carrier’s fleet of three MD11-Fs. According to newly promoted charter and ACMI manager, Giacomo Sciuto, the new Ondemand product is expected to account for around 30 percent of Cargoitalia’s flying time.
“The MD-11 freighter is in a league of its own in proving an ideal aircraft for scheduled airlines needing short-term or periodic additional capacity,” Sciuto said. “But it does not require the same constant high levels of demand as newer and larger equipment, such as the B777F and B747F.”
Ondemand has been launched on the back of two key charter contracts for the Italian airline. It has recently renewed a contract with Africa West in which Cargoitalia is required to operate twice-weekly flights from Liege to feed the Africa West network from Europe. More significantly, Cargoitalia has also signed a “long-term” contract with Lufthansa Cargo to provide additional lift on the North Atlantic. Cargoitalia detailed this as a call for a twice-weekly operation between Frankfurt and New York and Chicago.
Lufthansa Cargo confirmed that it has signed a 340 block-hour agreement with Cargoitalia. “The original intention was that Cargoitalia would operate twice weekly on this route from October to December to help us through this peak period,” a Lufthansa Cargo spokesman said.“This contract has since been revised, due to weak demand, and Cargoitalia will now operate the 340 block hours from October to February next year, which means they will only be required to operate a weekly flight on our behalf.”
Either way, he said, “This is not what Lufthansa Cargo would describe as a long-term contract.”
Cargoitalia is taking on charter work on behalf of one of its toughest European rivals and is also flying the same route it operates with its own twice-weekly schedule service from Milan to New York and Chicago. The only other scheduled route flown by the airline now is a twice-weekly service to Dubai and Hong Kong. A new service launched with great fanfare to Atlanta at the start of the year has since been suspended, as has service to Shanghai.
Managing Director Giacomo Manzon admitted the airline has gone through a difficult year. “Our routes have been badly impacted by falling demand, overcapacity and rising fuel costs, resulting in our need to temporarily reduce frequency and suspend some services,” he said.
According to Manzon, Ondemand will soak up the airline’s spare capacity until the market conditions are right to restart its scheduled service expansion program. “Right now, we are remodeling Cargoitalia as a more flexible operation that can cater for every type of freighter requirement,” said Manzon.
That facelift appears to have begun earlier with the exit of commercial director Roberto Gilardoni, who had steered the carrier’s early marketing strategy. In his place, the airline has appointed Molocon Logistics Consulting, a Germany-based aviation marketing consultancy, to carry out a full review of Cargoitalia’s sales and customer services. Molocon’s senior partner Marc Oedekoven has taken on the new post of sales and customer relations’ director within the airline.
When Cargoitalia was launched in 2009, the intention was that a nominal fleet of MD-11Fs would get the airline through its launch phase, after which fleet upgrade would be a high priority. The airline, however, did itself no favors by acquiring two ex-Alitalia MD-11 freighters, according to analysts.
“These are horrible, inefficient aircraft with rear-loading, main-deck cargo doors,” an industry source said. “Even though their third MD-11F is a more workable passenger-to freighter conversion, the deficiency of these aircraft make it difficult to make money these days. You also have to question the viability of providing ACMI with such a small operating fleet.”
Even Manzon appeared to admit earlier in the year that the airline was weighted with inefficient capacity. “The MD-11s were a supposed temporary tool to fulfill our needs quickly in our launch phase, and we thought we would get four or five years’ life out of them,” he said. “We must now think about bringing in a new fleet sooner.”
The leases on the three MD-11s expire in 2013 and 2014, in anticipation of which the airline had signed an MoU with Airbus, with an order for five A330s. But Cargoitalia officials have said they might opt for Boeing 777 freighters instead. The switch would concern some airline officials, who say the 100-tonne capacity Boeing craft is too big for the market.
Manzon’s latest thoughts on the subject are that all bets are off for now. “Any fleet upgrade has been put on hold for the time being,” he said. “Current plans call for Cargoitalia to remain focused on the MD-11F for the next couple of years.”
Even if it could lay its hands on upgraded capacity in the nearer future, there are doubts the carrier could fully realize its potential.
“They could never make a A330 aircraft work in a standalone cargo airline; effectively, it is DC10 capacity with B777 costs,” an analyst said. “The B777F would work out of Milan, but it will take years for the airline to get [market] share back from the very aggressive competitors it now faces in the Italian marketplace.”
While maintaining a reduced scheduled-service portfolio, a new ACMI and charter division has been created to find additional work for the carrier’s fleet of three MD11-Fs. According to newly promoted charter and ACMI manager, Giacomo Sciuto, the new Ondemand product is expected to account for around 30 percent of Cargoitalia’s flying time.
“The MD-11 freighter is in a league of its own in proving an ideal aircraft for scheduled airlines needing short-term or periodic additional capacity,” Sciuto said. “But it does not require the same constant high levels of demand as newer and larger equipment, such as the B777F and B747F.”
Ondemand has been launched on the back of two key charter contracts for the Italian airline. It has recently renewed a contract with Africa West in which Cargoitalia is required to operate twice-weekly flights from Liege to feed the Africa West network from Europe. More significantly, Cargoitalia has also signed a “long-term” contract with Lufthansa Cargo to provide additional lift on the North Atlantic. Cargoitalia detailed this as a call for a twice-weekly operation between Frankfurt and New York and Chicago.
Lufthansa Cargo confirmed that it has signed a 340 block-hour agreement with Cargoitalia. “The original intention was that Cargoitalia would operate twice weekly on this route from October to December to help us through this peak period,” a Lufthansa Cargo spokesman said.“This contract has since been revised, due to weak demand, and Cargoitalia will now operate the 340 block hours from October to February next year, which means they will only be required to operate a weekly flight on our behalf.”
Either way, he said, “This is not what Lufthansa Cargo would describe as a long-term contract.”
Cargoitalia is taking on charter work on behalf of one of its toughest European rivals and is also flying the same route it operates with its own twice-weekly schedule service from Milan to New York and Chicago. The only other scheduled route flown by the airline now is a twice-weekly service to Dubai and Hong Kong. A new service launched with great fanfare to Atlanta at the start of the year has since been suspended, as has service to Shanghai.
Managing Director Giacomo Manzon admitted the airline has gone through a difficult year. “Our routes have been badly impacted by falling demand, overcapacity and rising fuel costs, resulting in our need to temporarily reduce frequency and suspend some services,” he said.
According to Manzon, Ondemand will soak up the airline’s spare capacity until the market conditions are right to restart its scheduled service expansion program. “Right now, we are remodeling Cargoitalia as a more flexible operation that can cater for every type of freighter requirement,” said Manzon.
That facelift appears to have begun earlier with the exit of commercial director Roberto Gilardoni, who had steered the carrier’s early marketing strategy. In his place, the airline has appointed Molocon Logistics Consulting, a Germany-based aviation marketing consultancy, to carry out a full review of Cargoitalia’s sales and customer services. Molocon’s senior partner Marc Oedekoven has taken on the new post of sales and customer relations’ director within the airline.
When Cargoitalia was launched in 2009, the intention was that a nominal fleet of MD-11Fs would get the airline through its launch phase, after which fleet upgrade would be a high priority. The airline, however, did itself no favors by acquiring two ex-Alitalia MD-11 freighters, according to analysts.
“These are horrible, inefficient aircraft with rear-loading, main-deck cargo doors,” an industry source said. “Even though their third MD-11F is a more workable passenger-to freighter conversion, the deficiency of these aircraft make it difficult to make money these days. You also have to question the viability of providing ACMI with such a small operating fleet.”
Even Manzon appeared to admit earlier in the year that the airline was weighted with inefficient capacity. “The MD-11s were a supposed temporary tool to fulfill our needs quickly in our launch phase, and we thought we would get four or five years’ life out of them,” he said. “We must now think about bringing in a new fleet sooner.”
The leases on the three MD-11s expire in 2013 and 2014, in anticipation of which the airline had signed an MoU with Airbus, with an order for five A330s. But Cargoitalia officials have said they might opt for Boeing 777 freighters instead. The switch would concern some airline officials, who say the 100-tonne capacity Boeing craft is too big for the market.
Manzon’s latest thoughts on the subject are that all bets are off for now. “Any fleet upgrade has been put on hold for the time being,” he said. “Current plans call for Cargoitalia to remain focused on the MD-11F for the next couple of years.”
Even if it could lay its hands on upgraded capacity in the nearer future, there are doubts the carrier could fully realize its potential.
“They could never make a A330 aircraft work in a standalone cargo airline; effectively, it is DC10 capacity with B777 costs,” an analyst said. “The B777F would work out of Milan, but it will take years for the airline to get [market] share back from the very aggressive competitors it now faces in the Italian marketplace.”