The end of 2017 proved extremely busy for Air Partner, and director of freight Mike Hill is expecting a strong start to 2018.
He says the strong growth in the second half of the year came from geopolitical situations and extreme weather creating high demand for cargo charters from all Freight division offices.
This followed on from strong first half results with gross profits up 42.9 per cent and underlying operating profits increasing 88.6 per cent in the six months up to 31 July 2017.
Capacity not keeping up with demand has also been a factor, Hill explains: “IATA reported that traffic in the first nine months of 2017 had risen 10 per cent over the same period in 2016 despite a rise of capacity of only 3.6 per cent, so some of this shortfall is indirectly reflected in the increased cargo charter demand that we have seen during the year.”
He adds: “In this last quarter we have also seen the first peak season in quite some time, so securing aircraft capacity on long sectors has been more challenging during the last months of 2017.”
Hill says Air Partner is receiving a lot of repeat business, with a number of sectors expected to remain strong into 2018.
He says: “The pipeline is looking strong for the first quarter and we have a number of forward cargo bookings, particularly in the entertainment and sport industries.”
The automotive industry continues to be a significant part of Air Partner’s cargo business, especially time critical movements within Europe and North Africa, and this has remained strong.
“This is due to the long-term relations we have with the freight forwarders and logistic companies within this sector,” Hill says.
Air Partner’s RED-TRACK system has proved popular, with Hill saying: “RED-TRACK, our exclusive online confirmation and tracking system, gives our clients extra visibility on every order, and they can pass this customer service add-on to their customers as well, whether it be a charter or hand-carry shipment.”
Cargo charter remains an unpredictable business, and one thing Air Partner has noticed is forwarders creating specialised departments in certain niche products, such as time-critical, in order to complement their air and sea offerings.
Hill says: “We are seeing the forwarding sector in general become more aware of cargo charter and its benefits, despite the perceived high costs.”
He also says: “Air Partner Freight is a relative newcomer in the cargo charter market compared to some of our competitors, so there are still a lot of forwarders who do not yet know us.”
There has been a surge of new broker companies, which is making the cargo market quite crowded and increasing competition.
Hill says: “Some broker companies also are beginning to blur the commercial boundaries of broker/forwarder by working directly with shippers. This may be in response to forwarders sometimes working directly with charter operators as well.”
Air Partner will not be going down that route, with Hill explaining: “We, however, are committed to maintaining our close relationships solely with the freight forwarder community and this – along with our global presence and the financial transparency afforded by Air Partner’s plc status – has played a large part in our past success, and no doubt will continue to do so in the future.”