Rise to the top
Emirates has suspended its freighter service to Lomé, Togo, that it operated as a codeshare with Africa West, but new freighter destinations include Erbil in northern Iraq, where oil and gas equipment is in demand. Osaka and Seoul will follow from September. Menen’s main concern remains fuel prices. “With the world economy doing what it’s doing, oil at $114 per barrel makes no sense. It should be $40 to $60. Where is the demand [to justify this]?” he asks. “We have split out our surcharges and made it totally transparent, but you can’t recover the entire cost.”
The steady expansion of Moscow-based AirBridgeCargo’s scheduled freighter fleet lifted Volga-Dnepr Group four places up the IATA table to 25th place. After selling off its last B747 Classics, ABC currently operates eight 747-400s and two 747-8s, with a third due for delivery in the last quarter. “Nothing is older than three years, so it’s one of the world’s youngest and most efficient fleets,” says Wolfgang Meier, the carrier’s executive vice president of sales. Meier is optimistic about prospects for the rest of this year despite the continuing surplus of freighter capacity out of China. “We don’t allow ourselves in this industry to talk about ‘peak season’ any more,” he says. “But we’re making a big change in our footprint and trying to give customers a wider product spread.”
The China-U.S. service that began three times a week in August, linking Chengdu and Moscow to Chicago and returning east via Amsterdam, increases to a fourth frequency in September and will go daily in October. Some Chengdu-Chicago services will take a direct trans-Polar route before the end of the year, Meier confirms, with the ex-China flights stopping at a currently unspecified hub in eastern Siberia to pick up additional feeder cargo from Shanghai, Beijing and Hong Kong. ABC has moved to serve inland Chinese points of origin, following the relocation of much of the country’s industry. As well as Chengdu, it is serving Chongqing and Zhengzhou.
Without commenting specifically on yields and load factors, Meier says: “It’s transition time in China. It will take time, but we came in early at locations, such as Chengdu, and the -8s bring a new dimension.” Westbound into Europe, ABC is now focused on Frankfurt, with a twice-daily frequency, plus Amsterdam (10 per week), Paris, Zaragoza and Milan Malpensa (each twice-weekly). A Beijing-Hannover service proved short-lived, but Meier says this concerned bilateral agreements — not commercial issues.
Cargolux has also added two weekly services to Chongqing. Maintaining the carrier’s historic “milk run” model, the services call at intermediate points including Doha, Qatar ; Sharjah, the United Arab Emirates; Singapore; Kuala Lumpur; Tbilisi, Georgia; and Baku, Azerbaijan. A weekly service to Sao Paulo and Manaus was launched in May, returning to Europe via Quito and Bogata. Frank Reimen, recently appointed as interim president and CEO of Cargolux, describes Brazil as “the economic engine of the region.”
The fourth B747-8 freighter out of 13 joined the Cargolux fleet in May. The more fuel-efficient aircraft are gradually replacing 747-400s, but Cargolux is reducing fleet size and cutting back frequencies on some established routes.
REVENUE MANAGEMENT IS KEY
Virgin Atlantic reported a 7-percent increase in cargo revenue in its 2011-2012 financial year. Tonnage is down by 5 percent, year-over-year, but yield increased by 11 percent. This reflected revenue and capacity management rather than any change in the product mix, says John Lloyd, director of Virgin Atlantic Cargo.
“It’s more difficult in soft markets to hold the line on rate, but it’s easier as a smaller operator compared with the freighter operators,” he says. “We have just one daily service to Hong Kong and one to Shanghai, so it’s not as if we have 100 tonnes to sell. We can be more disciplined about how much we will discount. We’re still flying close to 100-percent full.”