Cargo takes centre stage
At a conference during the recent passenger-driven Routes 2011 event in Berlin, the message was that the value of the air freight business is still not understood by many in the wider aviation industry. Yet, when it comes to launching a new route, its influence can be crucial, Mike Bryant reports.
The people who attended the special air cargo streamed session of the World Routes Strategy Summit, itself a key part of Routes 2011 held in Berlin at the start of this month, heard more than enough to understand the increasing importance that this annual event is giving to air freight. To reinforce the point, everyone present was made very aware by a succession of panelists that the profile of the air freight sector needs to be raised further in the consciousness of many beyond the industry.
Des Vertannes, head of cargo at the International Air Transport Association (IATA), was first up to stress the value of this sort of conference to the industry. Right now: "We're facing so many challenges you almost have to be a magician" to what is coming, he said.
While Routes is all about bringing airports and airlines together, Vertannes believes it is also another opportunity to make more people aware of the value of the air freight sector; "We need to raise the profile of air cargo." he insisted.
Although many European airports have crowded or inefficient freight handling infrastructure, places like Durban's new King Shaka International airport in South Africa are pointing the way, Vertannes said. There, public-private partnership is allowing significant investment in cargo facilities, even at a time of economic and business uncertainty that may lead some carriers to question the wisdom of bringing new equipment into their fleets.
The first of the three panels that came together at the Strategy Summit to discuss air freight considered the question of 'making cargo a cornerstone of route success'. Ram Menen of Emirates, Lise-Marie Turpin of Air Canada and Chris Mangos from Miami International airport were in complete agreement over the value of air freight to any routeing, whether it be the decision to launch a new one or to continue with an existing one.
Menen pointed out that operating freighters and widebody passenger aircraft carrying goods in their bellyholds gives his airline a flexibility not available to all carriers. Passenger routes are less sensitive to 'directionality', he noted, with directional imbalance being a factor that can make a freighter operation unsustainable. Using both passenger and all-cargo equipment together for Emirates' freight operations, Menen considered: "It's all about creating a harmony in our network."
Turpin added that for Air Canada, when deciding on routeings: "Cargo is always at the table." She said that a new routeing must now be pretty much profitable straight away and noted that freight can make the difference between profit and loss on a great many connections.
Finally, Mangos recognised that airports are very much a reflection of the community that they serve. To this end, given the importance to Miami's role in the movement of air freight, the airport could not step away from the business, even if the Florida gateway wanted to, he considered.
The value of air freight to local economies was also brought up in the second panel, when David Hoppin of Hoppin Associates noted that air freight gateways are very much economic drivers. Long-term, the cargo business has grown faster than the passenger business in the aviation industry, he pointed out. Cargo can be vital to airlines in making the difference on marginal routes, of course, but it can also be a real source of alternative revenue for an airport - making the most of real estate potential.
When it comes to cargo, Hoppin believes that many airports are actually talking to the wrong people. As well as airlines, he advises that freight gateways should talk to freight forwarders, and engage in discussion with them about trucking networks as much as about aircraft and air routes.
Steven Verhasselt of Belgium's Liège airport noted that different gateways have various motives and drivers. At Liège, for example, business is driven by the needs of its public-private partnership owners - the private sector wants profit, the majority owner local government is keen to see the airport provide employment opportunities.
Tatyana Arslanova of Moscow-based freighter operator AirBridgeCargo was very keen to stress the importance of an airport being genuinely 'cargo-friendly'. This entails much more than offering small financial incentives, which often mean very little in terms of the overall cost of operation to a freighter operator. It means meeting the needs of the all-cargo carrier, Arslanova declared. Freighter operators should not be expected to play second fiddle to passenger carriers who receive priority when some aircraft must be delayed, nor always be second in the queue when there is limited de-icing equipment available during winter snow.
Jim Owens, vice president cargo at UPS, noted that the model of an integrator differs to that of a scheduled cargo carrier like ABC. One of the major differences is that the integrator must be in it for the long-haul - when making choices of destination airports, UPS will look to the next couple of decades, he stressed.
Franz van Hessen of Cologne Bonn International airport was joined on the stage for the third and final panel discussion by Christa Soltau from Budapest airport and Shahari Sulaiman from MASkargo. Soltau made the point that everyone in the hall was possibly in the wrong place - they should be with the people involved in the passenger side of the aviation business, explaining what the air cargo industry is all about, she remarked.
Van Hessen also wanted to see greater attention given to air cargo, which is often regarded as the poor relation to passenger traffic. In conclusion, Sulaiman said that airports must truly understand the needs of their carrier customers if they are to be successful together. And not just that, they must understand their business model, their operation and their equipment, he noted.