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Charter and scheduled cargo carriers pair up

By Staff Reports on August 28, 2013

Is there a new dynamic emerging between the charter and scheduled cargo sectors?

You would think so.

Previously estranged bedfellows, it would now seem they can’t snuggle up close enough to one another. The about-face has been given its most public airing with the recently signed union between Chapman Freeborn Airchartering and Lufthansa Cargo.

The leading UK-based global charter broker has been assigned to handle all of the German carrier’s third-party cargo chartering requirements. It is a deal engineered on Chapman Freeborn’s part by its Frankfurt-based CEO Russi Batliwala.

“This is not so much about a scheduled cargo carrier wanting to gain greater leverage or revenue flow from the charter market,” Batliwala says. “It is more about an airline, like Lufthansa, wanting to provide full service to its customer base.”

The carrier, he explains, already has extensive network reach through its dedicated freighter fleet and available belly-hold capacity to service most needs of its client base.

“The issue arises when the airline is requested to move goods to a beyond point outside of its regular routes,” Batliwala says. “It is not very customer-friendly when you can offer service from point A to point B, but not to point C, which will require a charter element.”

That, he says, is where Chapman Freeborn will come into the frame.

“Our global network of offices will be able to access charter capacity on behalf of Lufthansa Cargo quickly and efficiently and provide to the end customer what, to all intents and purpose, will be a seamless service,” he says.

On the same basis, Chapman Freeborn will also be responsible for sourcing capacity for line-haul charters when loads cannot fit on an LH Cargo MD-11F.

In some respects, the deal between Lufthansa Cargo and Chapman Freeborn AirChartering at least clears up a rather messy set-up the German carrier previously had in place. This was when all its charter activities were handled through its “daughter” company, Lufthansa Cargo Charter Agency, which has since been folded into the airline’s mainstream business and is in effect no more.

“It was never quite clear if Lufthansa Cargo Charter Agency was fish or fowl, acting as a neutral charter broker on one hand, but marketing Lufthansa’s freighter fleet on the other,” one aviation consultant comments.

That anomaly appears to have been clarified in the new deal with Chapman Freeborn, who, although responsible for sourcing the carrier’s third-party charter needs, will not take on the direct marketing of its MD-11F capacity.

“Chapman Freeborn clients will benefit from the enhanced access to Lufthansa Cargo’s freighter fleet – but we’ll maintain our position of neutrality in the marketplace and continue to work in partnership with cargo airline suppliers worldwide,” Batliwala says.

For LH Cargo’s part, it confirms that it has “insourced” responsibility for chartering its MD-11F capacity.

“This third-party agreement with Chapman Freeborn now allows us to focus on marketing the charter capacity on our own fleet of 18 MD-11F aircraft,” Andreas Otto, Lufthansa Cargo board member product and sales, says. “With the newly adapted structure, we are leaner and more focused, which means we can offer our own aircraft even easier and faster.”

Lufthansa Cargo obviously wants to retain freighter neutrality in order to provide maximum marketing potential for its own fleet. But, truth be known, as a

Lufthansa Cargo spokesman confirms, charters represent less than 1 percent of its core business.

Hard on the heels of the deal signed in Frankfurt, Batliwala more lately has enplaned to Zurich to sign a similar third-party strategic partnership with Swiss WorldCargo.

As Swiss is part of the greater Lufthansa family, does this preclude the charter broker from signing deals with any other carriers outside of this remit?

“No, we are relatively unconstrained in those terms,” Batliwala says. “But from our own point-of-view, I think there is a limitation to the number of mainstream scheduled carriers that we can represent.”

That said, Batliwala is keen to extend the portfolio.

“I think there is room and potential for us to adopt both an Asian and a Middle East carrier into this business model,” he says.


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