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Low cost lift

Low cost carriers are finally ramping up their push into cargo, with longer routes and more widebody aircraft helping make the case, as Ian Putzger finds out

At the end of 2015, Scandinavian courier firm Jetpak laid the ground for same-day flows between the UK and the Netherlands – two markets it had entered earlier that year. The high-speed channel to link the two markets for door-to-door services is UK-based low cost airline Flybe, which entered a cooperation agreement with the courier company in December. The deal also includes links from Germany to the UK on Flybe routes and the airline's domestic sectors in Britain.


Bernd Keller, Director of Jetpak Europe, called the move a milestone for his company. 


Historically, many low cost carriers (LCCs) have eschewed cargo, mostly out of concerns that the loading and unloading of freight might affect their tight turnaround times, but they are becoming a more viable avenue for shippers and forwarders.


"Low cost carriers have definitely become more of an option," remarks Bob Imbriani, Executive Vice-President, International of forwarder Team Worldwide. "I think some of the small carriers are looking more to cargo," he adds.


Three trends have elevated the profile of LCCs on the cargo scene. As some push into the international arena with longer sectors, and take on widebody aircraft, the case for loading cargo to supplement passenger revenues becomes more forceful for their CFOs and longer ground times on those sectors allay worries about possible delays from cargo loading.


Norwegian Air Shuttle embraced cargo and set up a freight subsidiary in 2013, after the start of its first longhaul route. When the airline mounted flights to Oakland earlier this year, the operator of a cold storage facility at the airport joined the welcoming celebration, looking forward to regular loads of Norwegian salmon and crab.


A second development that is pushing LCCs into the cargo market is the interest among legacy carriers in spinning off low cost offshoots, especially if these use widebody aircraft on international sectors. When Air Canada launched its Rouge subsidiary in 2013, this meant additional capacity for the airline's cargo division, which took the freight side of the new outfit under its wing. This gave Air Canada Cargo a growing fleet of Boeing 767-300s that were shifted over to Rouge as Boeing 787 Dreamliners arrived to replace them at Air Canada. In terms of processes and marketing there is no difference; the Rouge planes simply give Air Canada Cargo incremental capacity and revenue.


Rouge is heavily focused on the leisure market, which means that a number of destinations like Venice are of limited use to the cargo division, but on other sectors there is healthy demand for lift, according to Lise-Marie Turpin, Vice-President of Cargo.


Another dynamic in favour of a growing role for LCCs in the cargo sector is the surge in parcel traffic from B2C e-commerce.


"We benefit a lot from e-commerce business. We move a considerable amount of e-commerce goods," reports Wally Devereaux, Senior Director of Cargo and Charters at Southwest Airlines. "Some customers move a lot of e-commerce goods. Our network is good to support that."


For forwarders that manage e-commerce flows to intercontinental destinations, LCCs can play a role in the regional distribution. Team Worldwide bundles e-commerce shipments in consolidations to break them down after clearance and feed the shipments into various regional distribution networks, depending on the transit time requirements. Some packages of higher value or urgency can end up on regional narrowbody flights. >>

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