Cargolux has noticed some downwardpressure on routes from Europe toDubai, Abu Dhabi and Sharjah, accordingto Pierre Wesner, the carriers’ vicepresident sales and marketing EMEA,which suggests that these routes mightbe in danger of over-capacity.
That is of particular concern to Europeanfreighter operators, who oftenuse stops in the Middle East to counterpoor or low yielding eastbound loads onflights from Europe to Asia.
In Cargolux’s case, for example,around half of eastbound capacity onAsia-bound flights is devoted to cargobound for the Middle East, and inrevenue terms the percentage is evenbigger, with Wesner saying there is "abig difference" in rates.
Cargolux is responding to signs ofa softening in the Europe-Middle Eastmarket by making more stops in Baku,which Wesner says remains a very strongmarket for the carrier. "We are looking to enlarge this further, perhaps by adding some additional airports in the region."
On the subject of possible loomingover-capacity out of Asia, and particularlyChina, as new freighter capacity is addedby carriers such as Great Wall, Jade,Cargoitalia and Yangtze River Express,Wesner says Cargolux has seen no rateimpact yet. "But I cannot imagine that with a capacity increase of 1,000 tonnes a week, there won’t be an impact."
And he adds: "The same will happen in the Middle East. Carriers there are expanding their fleets and we cannot expect the current situation, where European carriers dominate the market, to continue."
Faced with such competition, Cargoluxmight have to shift its emphasis toother markets, he admits, pointing outthat in the last three years, Cargolux hasalready opened eight African destinationswhen before it had none.
"European carriers are going to haveto be more creative, and apply a lot ofstrategic thinking rather than competingon price and cost," he says. "They will have to look at combinations of markets to maintain average prices."