For most air cargo carriers, taking delivery of another aircraft in this current environment means an extra capacity burden and all the headaches that go with it. But for Russian cargo carrier Aeroflot Cargo, the addition of its latest MD-11 converted freighter has not been so much of problem in terms of filling it, but rather the poor yields that are an unfortunate feature of the market now.
Ã¢â‚¬Å“We just increased our frequencies from Russia to China Ã¢â‚¬“ Bejing and Hong Kong because weÃ¢â‚¬™ve got yet another aircraft delivered,Ã¢â‚¬Â Aeroflot Cargo key accounts manager Kmitry Zaitchikov told Payload Asia in Munich.
Ã¢â‚¬Å“There are some positive signs we can see in the Chinese market. Out of Hong Kong, at least since beginning of this year, our flights are full but the bad news is that yields are still down. But we still have to operate at a cost, to keep our customers with us,Ã¢â‚¬Â he adds reflecting a common sentiment in the market currently.
Ã¢â‚¬Å“With the new aircraft we will be able to increase frequency plus we started operating to Hong Kong, Mumbai, Dubai. We are also planning to check business opportunities in Pakistan. This is a new market for us and will check whether it is economically viable,Ã¢â‚¬Â he said, noting it would be a continuation from the Mumbai, Dubai service.
Zaitchikov said the cargo carrier is also considering a new service to Miami Ã¢â‚¬“ on the route Helsinki, Miami, Helsinki, Moscow Ã¢â‚¬“ Ã¢â‚¬Å“but approvals might takequite a bit longer than expected.Ã¢â‚¬Â
Indeed for Aeroflot Cargo this is a key thorn in its side. ItÃ¢â‚¬™s bad enough to be fighting to survive in dire economic times, but the added problems of Russian bureaucracy mean a further competitive disadvantage for the carrier.
Ã¢â‚¬Å“Aside from the economic situation, we have some very serious Customs issues. We cannot attract much transit freight because of ridiculous bureaucracy in Moscow,Ã¢â‚¬Â Zaitchikov said.
Ã¢â‚¬Å“Russian customs does not seem to recognise their role, in facilitating trade,Ã¢â‚¬Â he said emphatically. Ã¢â‚¬Å“Right now they are simply killing our business initiatives as freight will go by other foreign carriers.Ã¢â‚¬Â
The problem he says, is that when Aeroflot brings cargo through its Moscow hub, even on transit, it is caught up in labyrinthine Customs procedures.
Ã¢â‚¬Å“The clearance time may take more than 48 hours Ã¢â‚¬“ itÃ¢â‚¬™s like playing Russian roulette with freight Ã¢â‚¬“ it may be released through customs and it may not, because of lack of paperwork, for example,Ã¢â‚¬Â he says.
Ã¢â‚¬Å“But we donÃ¢â‚¬™t know what kind of paperwork will be required for next shipment because there is no standard procedure plus technologies of our Customs are not that sophisticated and there are a lot of manual processes like manually stamping airway bills.
Ã¢â‚¬Å“So in terms of this, we will definitely lose that European freight to other European carriers, plus we have Lufthansa sitting next to us who are operating to most European and Russian cities.Ã¢â‚¬Â
The only solution, according to Zaitchikov, is to try and raise this issue with air transport authorities, something Aeroflot Cargo is working on, Ã¢â‚¬Å“but the process itself may take a long time Ã¢â‚¬“ not weeks or months, but years.Ã¢â‚¬Â
Currently Aeroflot Cargo is operating four MD-11 converted freighters with four more on order, along with limited belly capacity from AeroflotÃ¢â‚¬™s passenger aircraft.
As Zaitchikov notes, the cargo division had planned to expand its capacity with the purchase of at least two B737- 300 freighters but Russian Customs prohibitions on importing the US freighters for use in the domestic market and limited interest in that size of freighter in the European market effectively quashed those plans.
And a US$450million order for six all-Russian built, four-engine, wide body, Ilyushin Il-96-400T, ultimately fell through. Ã¢â‚¬Å“The Il-96-400T does not meet the basic requirements for fuel consumption, payload, etc.,Ã¢â‚¬Â he said adding that the manufacturer could not deliver the aircraft according to the original reported specifications.
In hind-sight it may not be such a bad thing that the expansion plans fell through, as the six IL-96 would have come on-stream this year in the midst of the downturn.
In the first three months this year, cargo volumes carried on both the cargo and passenger fleet totalled 21 582 tonnes, down 35 per cent year-on-year (y-o-y).
On the cargo side alone, the fleet uplifted 1,348 tonnes in January (down 60 per cent y-o-y), 1,776 tonnes in February (down 62.4 per cent y-o-y) and 3,358.1 tonnes in March (down 42 per cent y-o-y).
In first three months Aeroflot Cargo freighters carried a total of 6,482 tonnes, representing a decline of 54 per cent on the same period last year.