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A case of space

The charter industry is changing. Not only are airlines more willing to offer spare capacity into the charter market, but brokers are also looking to provide extra services to customers. Ian Putzger reports

One of the positive outcomes of the downturn that has suffocated the global economy since 2008 is the discovery of charter by scheduled freighter operators. Many of them had been happy to ignore the vagaries of ad hoc flying, content with the steady flows and yields associated with scheduled operations. Imbalances in trade flows may have produced some headaches, but the overall cost of a trip was reasonably – if not comfortably – covered by the headhaul sector in most cases. Charters were for the peak season frenzy out of Asia, if there were gaps in the schedule that allowed for the odd extra section at a juicy return.


However, the relentless pressure on yields has changed this thinking at a growing number of airlines. “A lot of carriers that were not interested in charters in the past now look to charters and to route diversions,” observes Justin Lancaster, group cargo director at Air Charter Service.


“Some airlines you could not reach on the phone a few years ago. They would respond four days later and it was obvious that they were not really interested. Now these carriers are flexible, open to ideas and quick to respond,” agrees Mike Hill, regional freight manager at Air Partner.


For some, like Nippon Cargo Airlines, charter has been elevated from an occasional opportunity to an essential element of their broad business strategy. Saudia Airlines went so far as to set up a dedicated fleet of three Boeing 747 aircraft specifically for charter activities, while 12 all-cargo planes are allocated to scheduled operations. By most carriers’ standards, this is a rather lavish endowment of a segment that was not exactly high profile before, considering that the Middle Eastern carrier did not show much interest in the charter business a few years ago, according to charter brokers.


“Charters are an important part of the overall revenue generation for Cargolux,” remarks Richard Forson, acting chief executive officer and president of the European all-cargo outfit. “We would like to develop it as much as we can.”


Volker Dunkake, general manager of Air Charter Logistics, notes that some carriers have become very zealous in their pursuit of new pastures. They offer prices that are one-third below what the rest of the market quotes, he says.


“Pricing is very aggressive, and fewer people are parking planes,” remarks Lancaster.


However, the noise is often a good deal louder than the action, it seems. “Everybody talks about it, but it does not necessarily happen,” he adds.


Moreover, a combination carrier’s sudden eagerness to fly charters does not necessarily mesh with the needs on the other side. Chapman Freeborn has not pounced on the new opportunities. “We do some, but our core operations are not within the classic model of what a combination carrier could accommodate readily,” comments chief operating officer, Shahe Ouzounian.


Still, there is a genuine desire among airlines to tap into the charter business more. In the early phase of the global downturn, 747-200Fs could be parked without significant impact on the bottom line. Now mothballing freighters is a lot more costly to carriers – and just at a time when a host of new widebody planes are poised to enter the market, Ouzounian points out. >>

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