Double-digit volume growth but yields keep falling

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After a slow start to 2016, growth picked up in September with a surplus of business like never before in December, Kales Group chief executive officer, Peter Kales (pictured above) tells Air Cargo Week (ACW) staff writer, James Muir.

He says volumes grew 15 per cent but yields narrowed month by month, and growth would have been stronger if the start of the year had been better.

Kales tells ACW: “If the first six months had not been as slow, overall we would have had substantial growth in tonnage and revenue compared to 2015 – which remained almost flat compared to 2015, despite higher volumes.”

As for 2017, Kales expects January to be strong due to the timing of Chinese New Year, though February could be weaker.

Further ahead, Kales comments: “After this we have to see what President Trump really means to the world economy, but we expect business as usual.”

2017 has started well, obtaining the European sales, reservation and administration contract for Saudia Cargo, supporting all aspects of airline operations.

Kales tells ACW: “With a special team dedicated in a separate company in Frankfurt we offer centralised yield and space control for whole of Europe, which will help to increase the
airlines yields, and optimise capacities.”

He adds: “Many airlines use multiple sales agents, and, or have different offices quoting
different prices – which generally works in a counter productive way for controlling and increasing yields and load factors.”

Kales believes that his company has market awareness “like no other” and will not walk away from responsibilities, such as taking action when shipments are delayed and solving claim issues.

He says: “We personally supervise trucks, pallet build up, where ever we can do this – also during weekends. If any problem occurs during loading, offloading, or unexpected delays, we do inform customers at once and we offer our full support to find solutions immediately.”

Kales believes the Group’s services offer many advantages, explaining: “Some airlines after some time think it’s so simple and easy, and start their own office, then realising that nothing comes easy.

“We are doing something different and have a relationship with many of our clients for so many years, and they know we take care and support them at any time…we think this
makes Kales Group still unique – but airlines do not always realise this.”

He does not see any major changes in the GSSA market, but comments: “As a GSSA we can offer all cargo services better, more professional, and most important much more cost effective and in the end – this will also remain the major target for the airlines – also for the future. Especially where yields remain under pressure more and more.

“That’s why, we as a service provider being present in our markets for very long time (over 20 years) – will always find airlines who like to be represented by Kales Group and want to be successful,” he adds.

Kales says his goal is to always improve services, telling ACW: “Our goal is to more and more extend our services to airlines, and serve them cost effective at the highest possible yields, offering active sales and marketing and investing in IT and operational supervision to ensure efficient and fast communication and guarantee capacity is used to the maximum.”