Cargoitalia slashes routes, must re-fleet soon
Weaker-than-expected demand has forced Cargoitalia to suspend additional services from its Milan hub to Shanghai and Hong Kong. Cargoitalia also dropped its service to Atlanta, introduced as an extension of the established Milan-Chicago route, after only three months.
The Italian freighter operator was scheduling one extra flight to each Asian destination for summer 2011, but managing director, operations, Giacomo Manzon said it has reverted to three flights a week and two respectively.
Echoing other European carriers, Manzon said traffic has been especially disappointing out of Shanghai. He added that Chinese carriers are providing stronger competition.
“The recent increase in fuel costs has prompted us to think about the philosophy of our MD-11 operation,” Manzon said. “It is not the best available equipment, and using it on an intensive network, if you’re not strongly supported, becomes expensive.
“The MD-11s were a temporary tool to fulfil our needs quickly in our launch phase, and we thought we would get four or five years’ life out of them," he continued. "We must now think about bringing in new fleet sooner.”
Leases on Cargoitalia’s three MD-11s expire in 2013 and 2014. Terms of an MoU with Airbus were renegotiated in April, and Cargoitalia will decide by the end of this year whether to go ahead with an order for five A330s.
“The game is open. It depends on cost and timing,” Manzon said. “The aircraft is a good option for us under certain conditions, but we’re open for discussions with Boeing about 777s. Those would have a fuel advantage, it’s no secret. But our experience of the Italian market suggests 100-tonne capacity could be too big, and we would lose flexibility. The A330 may be better suited to the southern Europe niche market. Either way will be a huge advantage over the MD-11.”
Italy’s mid-sized industrial manufacturers have generated good exports in the last few months. But with China “not performing well” and India becoming a less attractive option as capacity has entered the market, Manzon concluded: “It’s better not to be too bullish.