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Niche products pay off for Swiss

By Hpanchal on January 14, 2013

Swiss WorldCargo achieved an 8.9 percent increase in its freight tonne-kilometer performance in 2012, while its load factor nudged 0.8 percentage points higher to 79.3 percent.

The cargo load factor slipped back by 0.6 percentage points in December to 82.3 percent, compared with 82.9 percent in December 2011, but Oliver Evans, chief cargo officer, said this must be considered against the background of a substantial increase in the FTK figure year-over-year, “continuing to underline essentially full flights throughout the network.”

Full-year financials have not yet been released, but cargo is known to account for around 11 percent of Swiss’s overall revenues.

“Swiss WorldCargo is happy to have a business model which enables the company to normally fully utilize all available long-haul capacity. Therefore with the addition of Beijing and Newark as new destinations in 2012, we were able to increase traffic,” Evans elaborated. “We do not deploy freighters, or aim at the general cargo market. The market segments on which we focus with our limited belly capacity–express, mail, temperature-controlled cargo, valuables and vulnerables–are particularly resilient, and our reputation is such that we can expect to get a significant share of these niches as soon as we start flights into a market.”

Volumes were “erratic” in 2012 on certain routes such as South Africa, due to the narrow range of export commodities and the general economic situation, and Egypt, because of the unstable political situation. “On the positive side, a route like Beijing was a very pleasant surprise, as we did not see the gradual build-up of traffic we expect with a new route, and went straight to consistent full loads in both directions,” Evans commented.

Swiss WorldCargo saw general cargo yield drop during the year, while yields for its specialized products increased. Evans was hesitant about making firm predictions for 2013, but believes the addition of a new destination, Singapore, from May will make an important cargo contribution.

“The economic situation in Europe and North America remains extremely precarious, so any short-term resumption of consumer confidence is unlikely,” he summarized. “Longer term, the fundamentals of global trade are very positive, with ever increasing numbers of middle-class consumers throughout the developing world and increasing sophistication and value of goods traded, from medical instruments or products via electronics through to industrial parts or machinery.”

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