Leisure Works Harder

     Sometimes telling it like it is can be confusing.
     Take the case of Leisure Cargo.
     The company based in Düsseldorf, Germany has a name that sounds like a conflict in terms as it rolls off the tongue.
     Think about it.
     Leisure Cargo?
     If there is one thing that air cargo has to sell it is speed.
     Therein lies the rub.
     Ralf F. Auslaender, founded the company in January 1, 2000.Today Leisure Cargo is an important resource for an impressive and growing list of carriers whose business is tour-based. Keeping it simple has been job one since this long time cargo executive decided to focus exclusively on this market segment.
     In a nutshell, Leisure Cargo GmbH provides all carriers represented, with the full logistical know-how from sales and handling contracts to road feeder services on a worldwide or regional basis.
     But there is a lot more going on here, so let’s back up a bit.
     Airline professionals studying empty and unused aircraft capacity have mixed feelings and serious questions.
     Is there another possible source of additional income here?
     If we attempt to fill the empty holds, will that effort be really profitable considering related costs and other factors?
     While there are no simple answers, today there is the constant demand to travel that long, sometime rocky road as we attempt to bring business opportunities to market.
     A long-held industry quick fix to get into business has been to turn over cargo operations and sales to a General Service Agent (GSA).
      Most often the decision to go with a GSA is brought on by internal resources that are unable to cope with demand including costs related to start-up as well as with necessary market data.
     A traditional GSA presentation usually sounds something like this:
     “We are a regional sales organization which provides sales services within the defined territory.
     “Our commission will be 7.5 % from net sales.”
     Although there may be some “ value added” services put into the mix to sweeten up the package, the GSA approach and result has been fairly predictable throughout the history of air cargo.
     Despite the all-inclusive “less hassle” nature of turning over belly capacity to a GSA, Ralf Auslaender warns that sometimes the option ends up a dead end street for airline management.
     “The first questions should be apparent even before the ink dries on the contract.
     “Who controls the GSA, develops rate strategies, and organizes cargo revenue accounting?
     “What IT and reservation system is to be used?
     “With marginal cargo capacity and limited range of destinations, how do we draw demand and interest from the international cargo agent community?
     Mr. Auslaender insists that as an airline CEO travels down the GSA path, serious questions arise that apparently (if history is any teacher) have yet to be satisfactorily answered.
     “Leisure Cargo has a better idea,” Ralf Auslaender says.
     “To the carriers we serve, Leisure is the cargo division; a cargo management company that is 100% outsourced.”
     “Give us your schedule and available cargo lift and we will draw up solid revenue projection numbers.
     “Unlike others, we put our money where our mouth is.
     “Base revenues are backed up by payment guarantee.”
     Total remuneration of Leisure Cargo is generally a revenue share formula.
     In this scenario Leisure Cargo markets the entire capacity of a carrier under its own brand and manages the individual, internal processes such as worldwide sales, operations, ULD Control, warehouse supervision, cargo revenue accounting, IT solutions, reservation system, claims processing and settlement, interline relationships and executions of SPA’s and BSA’s.
     Leisure Cargo also assumes 100 % responsibility for all and any cargo handling costs through usage and applications ot its own cargo handling contracts.
     “A carrier under our umbrella can practically put its empty bellies to work from one day to another without tying up or investing any internal resources.”
     Through usage of only a single AWB for all airline clients under the wings of Leisure Cargo, legal issues such as claims processing and settlement can be dealt with directly through the Leisure Cargo legal department.
     Usage of one AWB strengthens the brand as well and avoids confusion among cargo agents.
     Currently 14 different airlines have outsourced their cargo operations to Leisure Cargo on a worldwide basis.
     Carrier’s include Air Europe (MXP), Air Berlin (BER), Air Madrid (MAD), Belair (ZRH), Eurofly (MXP), Futura (PMI), Hapagfly (HAJ / eff. 16.09.05), Iberworld (PMI), LTE ( PMI), LTU (DUS), Neos (MXP), Niki (VIE), SkyEurope (BTS), and Volare (MXP) compromising a combined fleet of 191 aircraft with a good mixture of narrow- and wide body aircraft servicing a growing number of 161 short-, medium and long range destinations.
     E-Champ IT co-hosted by Cargolux interconnects all 106 stations.
     The Leisure Cargo network of airlines and offices is managed by a small number of 32 employees spread over four offices in Hamburg, Düsseldorf (HQ), Frankfurt and Munich.
     Elsewhere the worldwide network is subcontracted and served by dedicated, local partners.
     In an age where alliances draw attention for their potential, Leisure Cargo is a kind of reality check, getting down to business as individual carriers pool their respective and varied routes, forming a network that continues to grow as new partners are added.
     “Leisure Cargo offers belly capacity.
     “But with 50 % of all air cargo traffic travelling in the bellies of passenger aircraft, we have a big enough playground to keep us busy for the near future.
     “Also with a number of low cost start-up carriers yet to take off, the potential of cargo revenue means that our agenda and work is cut out for us.”
(Günter Mosler)