Etihad Cargo, the fast-growing cargo division of Etihad Airways, is on a mission to cement itself as the industry’s leading air cargo partner. As the world returns to a more normal environment, Etihad Cargo is determined to emerge from the pandemic stronger than ever, with a customer-focused approach and sustainability firmly woven into every element of the business.
With a booming global air cargo market, the carrier is determined to seize the moment to expand its operations and offerings to customers globally, capitalising on growing markets and opportunities as it seeks to surpass its regional and international competitors.
Cargo key to strong profits
In June, Etihad Airways announced record-breaking results in its half-year 2022 results, as it secured a core operating profit of $296 million in the face of rising fuel costs. Increased focus on cargo operations played a key role in that, as they saw a 6% year-on-year improvement bringing in $802 million in revenue to the airline despite reduced capacity as travellers returned to the air. This improvement in Etihad Cargo’s operations meant the division was responsible for 35% of the airline’s total operative revenues between January and June.
“It’s continuing to be a key pillar of our group. As you know, during the pandemic, air cargo played a crucial lifeline for all airlines,” Tim Isik, vice president – commercial, said. “We currently have 79 cargo destinations across Europe, Asia, Africa, Australia and the Americas.
“We are a medium sized carrier, which can make it challenging,” Isik admitted, “But we are agile, and we like to deploy our aircraft where we can. We work very closely with customers and partners to really understand regional flows of demand and we try to adjust our network and schedules to meet that demand.”
increased focus on pharma logistics
Etihad Cargo takes pride in its ability to facilitate the shipment of pharmaceuticals via its PharmaLife product. After all, it was the first carrier in the Middle East to be awarded the International Air Transport Association’s (IATA) Centre of Excellence for Independent Validators (CEIV) certification in Pharmaceutical Logistics.
“We’ve increased our PharmaLife performance by 46% over the last year and have tripled PharmaLife volumes in less than two years,” Isik said, hinting at future expansion plans coming in the future. “We are in full alignment with the UAE government’s vision to position Abu Dhabi as pharma and life science hub in the region. It’s a great bridge between, not just Asia and Europe, but also the US and Africa.”
Partnerships in this sector have been key for Etihad Cargo to offer premium options for pharmaceutical and life science shipments across the airline’s network. In less than 12 months, we have increased our PharmaLife premium segment’s volumes of advances container leases five-fold.
As a founding member of the HOPE Consortium, launched in 2020 to provide a complete supply chain solution to address vaccine transport, demand planning, training, medical staff and digital technology infrastructure, Etihad Cargo has also played a significant role in transporting over 260 million vaccinations to 60 countries and facilitating end-to-end vaccine delivery with the rapid on-ground deployment of medical and logistics experts, medical staff and equipment.
As a sign of Etihad Cargo’s investment in its pharmaceutical strategy, the carrier recently entered into a memorandum of understanding (MoU) with B Medical Systems to develop and launch the world’s first airline-specific sustainable solution for the transportation of life-saving drugs, vaccines and high-value pharmaceuticals.
Etihad Cargo continues to invest in features to enhance its PharmaLife capabilities. “We increased our dry ice capabilities, with our full freighters carrying up to 13 tonnes of dry ice, five times more than previously and one of the largest amounts of dry ice that airlines are permitted to carry. We are also nearing completion of a brand new pharma centre, which will double our cool chain capabilities. That’s hugely important for any kind of PharmaLife products that we carry,” Isik said.
Flying the flag for sustainability
Etihad Cargo proudly became the first Middle Eastern carrier to join TIACA’s BlueSky sustain- ability verification programme in September, reflecting the company’s commitment to sustainable practices. The first phase of the programme will see the company’s activities assessed against a range of criteria, including decarbonisation, waste elimination and more.
“It’s a natural step for us to do that, as we have pledged to become carbon neutral by 2050. We saw an opportunity there to work with TIACA as we’re challenging the industry,” Isik stated. “We hope to see other carriers in the programme as well, so we can all work together to make air cargo more sustainable.”
For Etihad Cargo, it’s a core part of their strategy, having declared that they are determined to achieve net zero carbon emissions by 2050. “We do like to partner with organisations that have that commitment to the quality and service, as well as identifying ways of reducing CO2 emissions and pollution,” Isik commented, “which helps us play our part in creating a more end-to-end sustainable supplier pharmaceutical cold chain.”
Tackling headwinds hammering the industry
It’s no secret that the aviation sector is facing a challenging time at the moment, with labour shortages, lockdown restrictions and the rising price of jet fuel putting pressure on airlines and other companies linked to the industry.
In the company’s mid-year results, Etihad highlighted how its financial success came in spite of fuel costs soaring by almost 60% when compared with the same period last year. It’s partly the motivation for the purchase of the more fuel efficient A350F but also the airlines overall investment in sustainable aviation fuel (SAF), which will reduce costs for the carrier in the long run, while having positive environmental benefits.
“Fuel prices are making it harder for everyone, especially as customers are expecting to see rates come down,” Isik admitted. “Demand is still very high and we’re optimising our capacity in the best possible way.”
“But, also for us, it’s not just the fuel costs. There are supply issues, shortages in the supply chain, border restrictions, particularly in Asia,” Isik highlighted. “We’re really trying to proactively figure it out.”
Etihad Cargo makes no secret of the fact that Asia is a key market for further growth as the region seeks to become a global trade hub. However, unfortunately, the disruption in recent years due to Covid has caused operational and supply chain challenges in Asia that has limited operations.
in a show of strength and resilience in the face of a challenging atmosphere, Etihad announced in September that it had become the first international airline to operate long-haul passenger services to the top three Chinese gateways since the start of the pandemic.
“We’ve ramped up our website and launched a portal in mandarin. By having that ready and now being able to fly into China, into multiple gateways, i think it really prepares us for things opening up,” Isik said with an eye on the future.
The Asian market is “crucial” for the cargo sector, Isik stated, citing how during the pandemic there was significant demand for moving medical equipment and vaccines in and out of China. this demand has continued with the focus globally on e-commerce, which presents a “big opportunity” for the carrier.
When discussing what the carrier will focus on next, sustainability and digitalisation were at the forefront of Isik’s mind, two areas he sees going hand in hand as part of the company’s growth plans. “We want to be the easiest cargo airline to do business with and we want to be the air cargo partner of choice.”