Falling rates out of Asia are putting pressure on SAS Cargo’s freighter cooperationsin the region.
Ulrik Marschall, the carrier’s head of corporate communications, admits that it is fi nding it harder to profitably fi ll the capacity it takes on Air China’s thrice weekly B747F from Shanghai and Beijing to Copenhagen, which was launchedlast September.
“We had a very good start to the service, and there was defi – nitely a real need for it,” he says. “But while there is still plenty of cargo westbound, rates are suffering, and load factors have started to go down.”
He says SAS Cargo still remains committed to the operation and has no plans to terminate it, but does add: “We are of course looking at all the shared capacity we have all the time to be sure it stillmakes good business sense.”
Such analysis recently led the carrier to pull out of its longstanding freighter co-operation with Lufthansa and Japan Airlines between Gothenburg in Sweden and Osaka. SAS had been taking space three to fi ve times a week since the late 1990s on the service, which is operated with aLufthansa MD-11 freighter.
“Once again, it was a matter of price and demand,” says Marschall. “It had been under pressure for some time, and was no longer good business for us.” SAS still operates passenger fl ights to Tokyo, however.
The Scandinavian carrier’s other maindeck capacity to Asia is on the thrice weekly Emirates B747Fs from Gothenburg to Dubai and Hong Kong, and vice versa. Here Marschall says the growth in Dubai cargo is making up forany weakness out of Hong Kong.
Another challenge for SAS Cargo to contend with in the past year has been a big increase in maindeck capacity to its home market. In August Korean Air started fl ying twice weekly with its B747 freighters to Stockholm, and Jade Cargo also recently started similar services to the airport. Both carriers are using Sweden to fi ll up on eastbound cargo on the way back from Asia.
Meanwhile, China Cargo Airlines started thrice weekly MD- 11F services from Copenhagen in January. All of this puts pressure on SAS in its home market. Marschall admits that there has been some price pressure as a result, though he says eastbound rates have been weak for some years.
SAS Cargo also takes space on Korean Air freighters eastbound across the Altantic to Oslo and Copenhagen, and both ways on Emirates freighters from Gothenburg to JFK. A freighter cooperation with Singapore Airlines between Copenhagen and Chicago was terminated earlier this year.
On the passenger side, fl ights to Dubai will start in October, which will be operated with A340s or A330s. At the end of March, the carrier switched all its Shanghai passenger fl ights to Beijing. Marschall says any other schedule changes await a new strategic vision for the airline, which is due to be unveiled soon by the parent carrier’s new CEO, Mats Jansson, who took offi ce in January. “We are all hoping that this includes some longhaul growth,” he says. – Peter Conway