The whole air cargo industry had a very strong year in 2017, but ATC Aviation managed to beat that by having what chief executive officer Ingo Zimmer (pictured) describes as a “perfect year”.
Not only did ATC benefit from increasing yields and strong demand, particularly in November and December where there was a lack of capacity with cargo being sold at express rates, but tonnage was also very good.
Zimmer says that growth out of Europe was around 15 per cent but ATC reported close to 30 per cent.
He comments: “We are ahead of the market but we benefitted like everybody else from increased yields so we can say in general it was a fantastic year and the trend continues a bit because express was for the end of the year but increased yields are staying on a higher level than before 2017.”
Yields continue to prove strong though not as high as when express rates were being charged in November and December.
“It was a fantastic year and for 2018 we are expecting a similar success.”
ATC has new airline customers with more on the way and there is additional capacity.
Zimmer says the outlook is good, though it is hard to know what the market will be doing by the end of the year but he predicts that yields will remain on a high level, volumes will increase.
At the end of 2017 and start of 2018 a lot of airlines started tender processes, which Zimmer says shows that airlines remain interested in the GSA business. ATC has been busy, receiving two to three tenders every week and though it will have to wait and see about the outcome, Zimmer remains positive.
Zimmer says: “ATC is a network GSA, if the customer is satisfied with your service they will probably give you the contracts in other countries so we are also planning to expand our network.”
ATC’s network in Europe is strong, particularly in countries including Switzerland and Germany, where at the former it sees 3-4,000 tonnes a month and the latter where it is about 7-8,000 tonnes a month. The USA is a very strong market for ATC where its 11 stations.
In 2017, tonnage was 260,000 tonnes worldwide with Europe up 30 per cent though Zimmer says the USA was a different story.
“It is still a market with a lot of pressure on the yields, and the growth is not like Europe.”
The Americas will be an important market in the future, with ATC planning significant investments though Zimmer did not want to go into further details at the time of the interview.
ATC is a well established company, that was founded in Switzerland in 1971. Zimmer has been with the company for 30 years but both he and ATC are working hard to remain a modern company.
“Our secret is that we have the experience and the financial backing. We have a yearly revenue of $350 million. We are financially sound, experienced and we go the extra mile for our customers,” Zimmer explains.
ATC is also investing heavily in state of the art IT systems and is in the process of getting a new system developed to the company’s needs.
Zimmer says: “The advantage is that all of our branches and our country organisations are using the same system. Modern IT makes us competitive because productivity will be increased.”
ATC is also investing heavily in sales with verticals, including hiring an asset manager who was doing pharmaceutical sales for one of the major European airlines.
“We are going into the verticals. We have dedicated sales for verticals like pharma, perishables and valuables. This is where the benefit for the airline comes from because this is where the yields come from.”
It is one thing to gain new contracts, but renewing existing ones is vital for business. ATC has been very successful in this area having served airlines including Ethiopian Airlines for over 20 years. Customers will remain loyal if they are happy with the service.
Zimmer comments: “They give us new contracts when we start in other countries because of the service and the experience with us. If you deliver a fair and good service you will expand your network.”
As for the future, value added services will be important; ATC has a sister company for trucking, another for data capture to name a few. It can also offering supervisory services of the cargo handling and trucking company.
Zimmer explains: “We are involved in many things besides the normal sales reservations. We develop strategies for airlines, new routes, market studies with customers asking for our expertise.”
He is confident that ATC has a strong future, saying: “We have the team who are motivated, we’ve got the top management and we do things differently. Even though we have grown over the years it is still a personal service.”