The big air cargo machine known as Air France/KLM/Martinair is a leading indicator of the global air cargo business, and while not exactly predicting doom and gloom, offers some observations, bringing one voice and message to represent all three carriers. AF/KL/MP is quick to not overstate the obvious or underplay the challenges driven by a very difficult world market in 2012.
     “It’s not a major announcement to say that, especially for Europe, the vision of the market is altogether bleak.

     “Persistent slow activity in international trade, further to the various successive crises we have faced since 2008, drives the air cargo environment in a kind of continuously difficult situation.
     “Besides, the constant overcapacity we can observe almost everywhere is an additional handicap, since overcapacity mechanically drives the yields down, even though part of the industry has tried—although unevenly—to counter this situation by capacity discipline through temporary freighter fleet reduction.
     “At the same time, the delivery of very efficient, wide body, long-haul, palletized passenger aircrafts to many airlines (such as the B777-300ER) and the arrival on the market of brand new full freighters of the latest generation (such as the B747-8F) continues, adding considerable additional belly hold and main deck capacity which, again, mechanically increases the already existing overcapacity.
     “AF/KL/MP believe that there will be a seasonal pattern, e g. that Q4 will be better than summer.
     “Nonetheless, all advanced indications point to a very small peak…
     “Looking ahead to 2013 and beyond is a difficult point to elaborate upon, since many parameters are out of our immediate control.
     “Traditionally, cargo activity is directly and tightly linked to the health of international trade and to the confidence the economical operators have or don’t have in this frame of exchange.
     “One must admit the present situation in Europe, where our three airline group is based, is not very good.
     “State debts have heavily impacted the business and hence, the way out of the tunnel is not that clear.
     “But further down the road and just over the horizon, 2014 could hopefully be the year of some recovery.
     “On the bottom line, which is where all focus must end up being applied, we are not profitable, and that includes our AF/KL/MP Cargo activities.
     “So we have launched an aggressive three-year recovery plan and branded it ‘Transform 2015.’
     “Transform 2015 aims to globally operate cost-cutting in each and every department of our three airline group, and to redefine a new economic model based on an increasing integration process between AF-KL and MP Cargo, enabling us to improve our global efficiency even more.
     “We are also dedicated to continue developing our ‘capacity discipline’ in the cargo field, at the same time as increasing the load factor of our long-haul, palletized passenger flights, thus utilizing our full freighters only when it has an economic rationale to do so.
     “Thanks also to our ‘Agility Loop’ process, we are focusing towards the improvement of our full freighter fleet global productivity and cost-effectiveness.
     “Last but not least, we continue to focus very much on the quality we offer to our customers and we keep a very strong relationship and close links in the market via our Customers Services Initiatives, which covers our extended worldwide network.
     “The idea is to be up close and personal and to always be there and available to understand specific needs and expectations of the shipper.”
Geoffrey

     Robbie Anderson, President, United Cargo is a well-known operations expert who has moved easily into the top spot at the legendary, Chicago-based legacy carrier.
     “Unfortunately, there's no sign of any strong, consistent growth in world trade.
     “Businesses and consumers remain uncertain about their economic future. In the cargo markets, the double-edged sword continues of increasing capacity and decreasing demand; we've been living with it since early 2011.
     “For the immediate future, we're cautiously optimistic that the cargo industry will enjoy some level of the traditional, holiday-related boost in volumes.
     “Longer-term, we believe United is well-positioned to take full advantage of the next cyclical upturn in our business.
     “When we consider that United will harvest the bulk of our cargo synergies when we cutover to one capacity, inventory management, and technology system, we're upbeat about our market position and believe the best is yet to come.
     “Our merger has set the table for United Cargo's success,” Robbie assures.
     “The combination created an unprecedented network of ten hubs linking more than 370 worldwide destinations.
     “Four of these hubs are among the largest air freight gateways in the world (Chicago, Los Angeles, Tokyo-Narita, and New York-Newark).

     “From a fleet perspective, United is one of the largest wide body aircraft operators in the world.
     “We have the best new order book and youngest fleet among U.S. major carriers.
     “The plan to keep United Cargo profitable is our effort to staying focused on the things we can control—the fundamentals that remain the same no matter the economic conditions.
     “For example, our entire team is concentrating on keeping our commitments to our customers every day and with every shipment.
     “We are proud of the way our teams are working together to meet this goal, and feedback from our customers confirms we're maintaining this focus on customer service.
     “Next, we are committed to staying close to our customers.
     “Our leadership team follows one of the most ambitious customer event schedules in the business, attending more than 30 functions in 2012.
     “This ensures we receive regular feedback to determine if we're doing everything possible to meet our customer needs.
     “If we're not, we rely on personal relationships based on open and honest communication to guide any adjustments in our course.
     “Besides promoting our fleet and network advantages, another important United strategy is our focus on higher-yielding specialty products, such as commodities requiring temperature-controlled shipping.
     “We continue to see solid, double-digit growth in TempControl, our service for temperature-sensitive commodities.
     “Also, our award-winning PetSafe product is experiencing explosive growth.
     “Our strong product line and comprehensive worldwide network are a winning combination in those areas of the cargo business that are prospering and growing.”
Flossie

     Michael Steen took up a key post as Executive Vice President and Chief Commercial Officer at Atlas Air in 2007.
     An economist by trade with a professional team player attitude acquired as a top athlete in his youth, Michael exudes a methodical approach to the industry’s challenges, which he admits are in no short supply.
     “The global airfreight demand is obviously under pressure and we have seen stagnation on many routes around the world.

     “The overall global economy has seen several macro challenges in 2012 e.g. EU debt crisis, political unrest in the Middle East, reduced consumer confidence, etc.
     “Having said that, there are growth markets out there like intra-Asia, South America, and Africa where we see growth year-over-year, so all is not lost even as the industry is facing some challenges.
     “The industry is also waiting eagerly for the new product introductions—new Smartphones, Tablets, and an overall uptick in airfreight demand as inventory levels are depleted to a record low across most industries—all of this will increase demand and consequently improve load-factors and yields.
     “Airfreight is historically a growth industry and we have seen many ups and downs over the past decades and we will face the same in the future.
     “We are now at a point where we will see the pendulum shifting and I foresee a modest growth in 2013 and a return to an approximate 3.5-4 percent annual growth over the next several years.
     “At Atlas Air, ACMI is as always working closely with our customers, who span across the entire air cargo supply chain (Integrators, Airlines, Forwarders) to ensure that we can help them reduce their operating cost, improve service and coverage, and consequently add new value to their bottom line.
     “As our most recent financials are showing, we have been able to deliver on that together with our customers even during the current downturn, and we will continue delivering on that strategy for the years to come.
     “The ACMI model has proven to work equally well in a challenged economy as in an upturn and we are looking positively towards the future.”

  Peter Scholten, VP Commercial at Saudia Cargo says, “We read the negative market conditions in the media, but Saudi Arabian Cargo grew our global freighter business 22 percent in September and our momentum continues year on year.
     “Our cargo division is adding flights to Hong Kong and Shanghai, and we see our business up over 20 percent as we continue to offer new services year to date (October 2).”  
     “Our business outlook is optimistic.
     “We expect to see positive trends and growth, particularly in the Middle Eastern region which shows great promise due to the strong economies of major countries such as Saudi Arabia and the Gulf States.
     “However, we also expect slow growth in the major developed markets, which are always affected by increases in cost and capacity. These two factors will mainly affect the global air cargo market.
     “Keeping Saudia Cargo profitable during these times includes many factors.
     “We plan scheduled freighter services by deploying the right equipment in the right market, thus avoiding a situation of overcapacity and low load factors.
     “On the other hand, we do our utmost to fulfill the requirements of our customers by offering a mix of products to serve their needs with a view to quality improvement.
     “We also continuously review contracts with our clients as well as with service providers to ensure that they are in the best interests of all parties involved.”
Geoffrey/Sabia

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