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Asiana Cargo looks to revamp network

By Staff Reports on July 1, 2013

The precipitous fall of the yen this year, engineered in Tokyo to boost Japanese exports, caused some furrowed brows in Seoul, but the anticipated effect on shipments from Korea has failed to play out, at least so far. Economists and exporters had braced themselves for a marked drop in traffic, but to their relief, after 0.4 percent growth in April, Korean exports were largely flat in the first 20 days of May.

Still, the momentum had been stronger earlier on. Airfreight exports from Incheon rose 6.2 percent in the first three months of the year, giving rise to hopes that the Korean market had been revitalized. Nevertheless, Asiana Cargo opted for a defensive strategy this year. Like a few of its peers, it is trying to do more with less, which translates into a reduction in freighter capacity.

At the end of May, the airline was due to hand back a B747-400F, whose lease was expiring, which reduces its freighter fleet to 10 owned 747-400Fs and one 767-300F.

“In this year, we are focusing on making a profit more than expanding volume. With the world economic recession, we need to concentrate on reading market trends and going into lucrative lines and products,” H.E. Shin, vice president of cargo sales and marketing, says.

He adds that Asiana is not planning to expand its freighter network for the time being. Instead, routes are under the microscope to reassess their benefits. So far the carrier has not suspended any sectors, but demand on all routes is under constant scrutiny with a view to revamping the network, Shin says.

The withdrawal of one 747 freighter is mostly affecting the transpacific sector. However, there are no plans to pull out of any U.S. market that the airline serves with cargo planes.

“We will consolidate some routes in the U.S. Each city capacity will be decreased,” Shin says.

Rival Korean Air has also been adjusting its transpacific capacity to bring it in line with demand, according to a KAL spokesperson. To cope with the high fuel costs on the long transpacific sectors, the airline has placed a new 747-8 freighter as well as a 777-200F on routes to Atlanta and New York respectively, replacing older 747-400F aircraft.

Belly capacity will shoulder a greater share of Asiana’s cargo this year, albeit not across the Pacific. Shin is upbeat on the carrier’s new route to Jakarta, Indonesia, which kicks off on July 19, anticipating good demand for electronics and textiles.

Shin is looking to grow traffic through closer ties with forwarders, particularly agents with whom Asiana has global partnership agreements.

“We are trying to expand the volume with existing GPA partners and find new reliable partners,” he says.

Service development is another key plank in Asian Cargo’s growth strategy.

“The most important challenge in 2013 is to make it a profitable year. The air cargo market is not positive at present; the first thing we need to do is increase profit and survive in the field. So we are trying to develop new products which will satisfy customers’ needs,” Shin says.

The drive has been captured in a slogan for the year: “We deliver trust.” To reinforce it, Asiana Cargo changed some internal processes and enhanced capabilities to give customers proof of delivery and proof of transit information. Customers can see POD and POT information on Asiana Cargo’s homepage or in their own system, and they can also access it on their mobile devices.

Status updates, as well as other functionality, have been extended to mobile apps.

“Asiana Cargo provides cargo reservation service, tracking and schedule information, etc. through our Android-based mobile application. In this year, every smart device (phone, tablet PC) user, including iOS-based devices, will be able to use Asiana Cargo mobile service with our newly upgraded application,” Shin explains.

In terms of special handling, a new offering was unveiled March 1. Before Service, which is designed for high value traffic, assigns an individual load master to the shipment who checks every step of the process from cargo acceptance to flight loading, and the customer gets information on every milestone. At this point, the service is available only at the carrier’s home base. According to Shin, initial responses have been positive.

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