Qatar targets sustainable growth through network expansion

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Qatar Airways Cargo

Despite now being the world’s third largest air cargo carrier, Qatar Airways Cargo shows no signs of slowing  down with Asia and the Americas its top target markets.

The carrier’s chief cargo officer, Ulrich Ogiermann says in the first quarter of 2016 tonnage is up 23 per cent compared to the same time last year.

Ogiermann says although industry reports proclaim weakening trade and currencies in Asia, Qatar’s biggest air cargo market, it is confident of improvement there for the rest of 2016, as more aircraft join the airline’s fleet and new destinations are added to the network from the second quarter onwards.

Qatar’s traditional trade lanes from Asia to Europe, Europe to the Americas and Africa to Europe remain its best sectors, and Ogiermann notes the load factor in India and Bangladesh is consistently high, as it has 30 weekly freighter frequencies to the region, while bellyhold capacity on 102 weekly flights to 13 cities in India helps strengthen its market share in the region.

The carrier strategically divides its cargo capacity across its freighters and passenger aircraft with 51 per cent of shipments carried on freighters and 49 per cent in bellyhold.

Ogiermann sees “encouraging growth” in sectors where it operates both freighter and passenger flights such as India, Europe and the Americas, noting: “Bellyhold cargo has been well received in our network simply because it is very cost efficient and appreciable in our industry where yields are always under pressure.

“The smart combination of efficient belly space plus freighters allows us to adjust our services flexibly, meeting the needs of our customers as well as the dynamic air cargo business.”

This year, it will receive two more 100-tonne capacity Boeing 777 Freighters after its ninth 777F arrived on 1 May and another two 777F will be delivered in July and October.

Ogiermann says they will be advantageously deployed to improve its Americas network, where it operates six freighters and 12 bellyhold flights, offering over 5,000 tonnes of freighter and bellyhold space every week.

He explains: “We certainly see opportunity for growth in the US market as our expansion in the Americas indicates – including the start of daily non-stop commercial service to Atlanta on 1 June.”

2016 will see its network expand and it will launch another 10 bellyhold routes to the  likes of Marrakech, Sarajevo, Namibia, Helsinki, Auckland, the Seychelles and Atlanta.

Ogiermann says from a cargo carrier standpoint, it is “crucial” it monitors load performance across its network constantly and whenever opportunities arise, it may instate aircraft and frequency upgrade rationally.

He adds: “For instance, we will be upgrading our flights to Geneva and Warsaw this year subsequent to progressive air cargo demand in both markets.”

The carrier’s freighter fleet plan will include upturning market share in the Americas, Ogiermann says to date, the Americas market contributes 10 per cent of its capacity: “In anticipation of robust demand, we will continue to expand our freighter portfolio in the Americas in 2016, with a tactical plan to consolidate our cargo traffic to and from the Americas in Luxembourg, our European hub.”

Last month, it launched QR Express, an airport-to-airport airfreight service for time critical shipments, which Ogiermann says will see a phased roll-out after its successful launch at Heathrow Airport and it aims to launch it soon at major origins in Asia such as Mumbai and Hong Kong.

As for challenges it faces, Ogiermann says over and beyond common subjects most carriers face such as fuel price fluctuation, safety and security compliances, weakening economies, its biggest one is upholding its load factors and yields from the ever-increasing capacity in certain regions.

He is quite clear of how it will grow: “Our best prospect is the airline’s continued investment and expansion of our fleet. We expect to outperform the market by strategically placing capacity in the right areas and offering the right combination of cargo products to the right destinations.”

You can be sure its target is to be the number one air cargo carrier, up from its number three position it occupies now, but to continue sustainable growth, Ogiermann believes service excellence is key and he says it constantly reminds itself to focus on innovation and tailor service offerings.

He feels Qatar will stay ahead of competition by achieving consistency of handling in safety, security, quality and operational delivery: “We set high standards for these disciplines and the capabilities of the ground handling agents are rigorously assessed with each new route launch or expiry of handling contract at existing stations.

“Our network handling partner program enables us to have an established framework with the global handling companies to ensure our specific requirements are met, irrespective of location.”

Ogiermann says Qatar is well positioned to “compete and win in any economic circumstance” and is confident it has the ingredients for success, but says even for Qatar – it is a “testing time”.

He is upbeat about the market and says there are bright spots with pharmaceuticals, manufacturing spots changing, trade patterns changing, and e-commerce on the rise: “Pharmaceutical products are of great importance for us – we have been working hard to get trade lanes certified by the big shippers. We see good prospects in pharmaceuticals, textiles, and perishables this year.

“We will continue to grow by matching the quantity of our capacity with the quality of our product, with a particular focus on a successive launch of exciting new products, backed up by state-of-the-art ground infrastructure and a team composed of the best talent in the industry.”