Iperating relatively quietly in the background since it gained its AOC in 1999, CAL Cargo Airlines made the strategic step last year of replacing its two B747-200Fs with two, more modern B747-400ER freighters – one leased and one purchased from the former Lufthansa Cargo joint venture Jade Cargo. As Eyal Zagagi, CEO of CAL Cargo Airlines put it, “we’ve started 2015 on the right foot with two upgraded fully operational aircraft.”
If there was any doubt as to the value of the services rendered by this part of the air cargo industry, the recent international air cargo figures from WorldACD, reveal that cargo GSSAs and GSAs combined have seen a substantial growth in revenues.
In fact, well over 20 per cent of global airline cargo revenues came from sales through GSA agreements. Data suggests that sales through GSAs were higher than those from other sources in Asia Pacific, North America, Middle East and South Asia. Two regions that GSAs did not do well were Africa and Latin America. GSSAs like Air Logistics Group (ALG), with its group headquarters in Paris, assist air carriers to achieve a cost-effective presence in a market where it could be uneconomical for an airline to maintain its own sales force and premises.
In fact, when the slowdown in the market happened due to the global recession, it did not pose an obstacle for ALG. It was an opportunity to innovate. Working with airlines and providing them service, ALG has created strong brand recognition across the world. That has also come about because the top management emphasises gaining local knowledge and understanding the local market.
Helmut Mair, managing director, Air Logistics Group ascribes the success of the GSSA to service. He said that Air Logistics Group was on top of things. “Our staff work longer hours when required, customer services teams are accessible at all times and we are ready to go the extra mile for the airlines we represent.”
He was quick to point out that while service to customers was the number one priority for ALG, the work that went on in the back offices was equally important. Outlining the agenda for growth and success, Mair said that ALG analysed capacities, managed yields and optimised products with added value services. These included “finding the right mix for pallet utilisation, finding additional cargo from new regions without jeopardising strong markets and developing interline opportunities.” All this while “still maintaining a personal relationship with the forwarders which is very important in today’s high-tech environment”, he added.
Information is king
ALG is guided by the strong belief that information is king and it strives to keep its clients on the ball – always. Back in 2013, the Group realised that improving information flow was of prime importance. The aim was simple: Make accurate information available to everyone in the chain as quickly as possible. So, the Air Logistics Group started to work on their information flows like the processing of air waybills, manifests, etc. And that work has paid off, having achieved success in speeding up the information flow.
The MD made it a point to mention that the Group had invested heavily in “our ‘total cargo management’ solution package that also includes IT solutions and financial accounting.” The model, he said, was “ideal for many smaller and midsized carriers”. What was more important was the fact that it was cost effective for many airlines since “certain costs can be stripped out while the continuation of revenues is guaranteed with a steady year-on-year growth”.
He recounted how over the last few years, “we have taken the risk to expand our network into new continents and regions and now the brand is established and recognised as the leader in the GSSA industry”. This, he said, allowed the Group to acquire new companies in strategic places and “upgrade our exposure at key locations” around the world. Additionally, that made the Group flexible enough to “step out from non-profitable outlets and focus on the growing locations instead.” Above all, he underlined, “our plan is to focus on being where our customers are and where our dedicated services are needed”.
Despite the challenges that almost every market throws up, ALG counters them head-on. “The challenges are the same for airlines and GSSAs but Air Logistics Group has the advantage of its extensive network and close relationships with freight forwarders and therefore it can react quickly to fill any gaps.”
Today, with its fully owned network of 81 offices across 48 countries, ALG claims it operates the most comprehensive GSSA network in the market. The international footprint has, in fact, gone a long way to strengthen its prime position in the market.
