After a weak start to 2016, the air cargo industry ended the year on a very positive note. This rang true for Etihad Cargo as well, who experienced freight growth at the end of the year, recording their busiest month in October, surpassing a recorded previous best by uplifting 501 tonnes more cargo. The freight division mainly attributed the result to growth in perishables traffic from Africa, US inbound and outbound traffic and volumes from Europe to Asia Pacific.
Etihad cargo, the fastest growing cargo division of Etihad Airways since its establishment in 2004 has had a steady growth rate over the years, leading up to becoming the US $1 billion business it is today. Apart from its freighter fleet, the cargo division is complemented by belly hold capacity from the passenger fleet, with over 100 aircraft, allowing them to carry more cargo to more destinations.
Despite the challenges they faced over the last two years with declining yields, Etihad Cargo has started the year off on the right foot, managing to maintain a modest growth rate through the first quarter of the year. “2017 has got off to a solid start and most of the indicators from industry analysts are positive. Th e first quarter of 2017 was noticeably quite strong for Etihad Cargo, and the upward trend looks set to continue into the second quarter of the year,” added David Kerr, senior vice president, Etihad Cargo.
Overcoming Obstacles through cooperation
For an already cut-throat market, the turmoil of a bad period raises the stakes for every stakeholder within an industry, especially for key players who play a crucial role in determining market trends.
Differentiation has been a significant factor in assuring not just survival, but a fighting chance to thrive within the competitive space. One of the practices adopted by Etihad Cargo is leveraging on strong partnerships with airlines in other regions. By aligning themselves with other airlines, such as Avianca Cargo in South America, they are able to provide customers with an additional 600 destinations. Kerr said “Our partnerships with other carriers stood us in good stead throughout a turbulent 2016. As an airline group, we have partnerships with other airlines which give us a lot more capacity into markets which we do not operate.”
Having these partnerships is one of the ways Etihad Cargo ensures they are able to give customers a wider choice of routes to fly their cargo. Apart from Avianca Cargo, Kerr also credited the strong partnerships with Alitalia, AirBerlin, Air Bridge Cargo, Aer Lingus and Royal Air Maroc for Etihad being able to expand its network reach throughout Europe and the Americas.
Cargo connect, a unique loyalty program that allows the carrier to reward its customers, has reached a redemption rate of 30 per cent in 2016. Reported as one of the highest among similar reward schemes in the industry. Following the enrollement of the 4000 th member into the program, which also happened during October 2016, Kerr pointed out that, “Customer loyalty plays a big part in the success of our operations worldwide.”
Location, location, location…
Abu Dhabi, a geocentric location, is home to the carrier’s hub. Offering a competitive edge of drastically reduced flight times to connect with emerging, expanding and mature markets, compared to carriers based in other continents. “Th is means we are ideally placed to serve billions of consumers from our hub,” Kerr added. Roughly, about one-third of the world’s population lives within a fourhour flight time from Abu Dhabi, and the remaining two-thirds are within an eighthour flight time. Fully capitalising on its geocentric location, a significant advantage shared by all the Gulf carriers, is one of the strategies the carrier utilizes to diff erentiate themselves in Europe and Asia.
To illustrate just how significantly the centralized location has contributed to the carriers ability to diff erentiate from competition, Kerr gave an example of taking garments from a manufacturer based in Sri Lanka or Bangladesh (both approximately a five hour flight away) to Abu Dhabi, then utilizing a combination of freighters and passenger bellies to distribute the garments to other destinations, such as Europe (also approximately a five hour flight time away). Th e same could be said for an electronics manufacturer in China for example, who requires freighter services to Africa, Middle East and Europe. From the hub, the travelling time to final destination for the cargo is greatly reduced.
Freighter vs. Wide Body
March 2017 saw Etihad taking delivery of its tenth freighter aircraft, adding to the four existing A330F’s and five Boeing 777.
The addition of the A330F is expected to further boost performance, responding to customer demand for increased freighter services. Th is follows a 12 month sustained growth period, which launched ten new freighter routes, increasing the overall number of cargo routes the carrier serves to 42. “Th e 10th freighter allows us to be even more responsive because we will be able to deploy an aircraft when and where demand arises, specifically we are able to increase services where necessary. An example would be to Hong Kong and Karachi,” Kerr added.
Looking at how all-freighter segments in the air cargo supply chain have evolved over the past few years, compared to wide bodied passenger aircrafts, Kerr noted that having access to both freighters and passenger bellies is what has enabled the carrier to serve destinations and customers they otherwise would have been unable to if they only had one or the other.
Pharma
Th e pharmaceutical industry moves over a trillion dollars worth of cargo every year. A carrier’s ability to uphold a shipments quality requires specific equipment and handling procedures, storage facilities and cooperation among cold chain partners. With all the above, including fitting into stringent regulations, they are then eligible for accreditation.
With plans to be one of the best air cargo providers in the industry, the carrier sited pharma as one of it’s bright spots. Among the other cargo products and services the carrier off ers, Temp Check is the premium product dedicated to handling pharmaceuticals and life science products.
Having contracts and accreditation with Envirotainer and CSafe has enabled Etihad Cargo to assure their customers that their trade lanes are well protected, which is critical to the valuable shipments.
Since 2003, Etihad has demonstated its credibility in handling Envirotrainer containers and cold shipmets, receiving its accreditation as a Qualified Environtainer Provider (QEP) from Envirotainer at six stations across its network. Namely, its hub in Abu Dhabi, Mumbai, New York, Mancherster, Melbourne and Sydnye. “Envirotainer’s QEP Accreditation is proof of our reliability within the temperaturecontrolled freight industry, and the result of hard work and dedication to our customers. We are proud to receive this acknowledgement and are determined to keep performing at an industry leading standard,” said Kerr.
With more than 70 Temp Check certified locations throughout Etihad Cargo’s international network, the carrier is determined to pursue QEP Accreditation at every single one.
