Robert Song, Executive vice president at AirBridgeCargo (ABC) Airlines says the introduction of hub operations gave immediate impulse to the development of airport handling facilities, ground infrastructure, IT systems, road transportation and warehousing services.

“Best industry practices are being studied and introduced, new jobs created and new transit traffic flows attracted,” he told delegates attending the recent Transport Logistic China 2010 conference in Shanghai.

Song says that as investment in China was going West, logistics services providers had to follow suit. Pointing out that higher incomes in the coastal provinces was making it expensive for export-oriented manufacturers who were also being squeezed by global cost pressures.

Minimal wages were also being increased in order to attract the work force back to coastal areas, but he warned that these higher wages will boomerang back into cost of production.

Song says that congestion in and around airports will not ease but would rather worsen in the coming years as more passenger flights will be introducedto cater to the needs of the travelling public with higher disposable income.“Favourable policies of Central and localgovernments will encourage factories(therefore freighter operators) to exploreWestern China as the next base of exportproduction and logistics’ development,”he says.

Turning to Moscow, Song says that the Russian capital had an advantageous geographical location between Europe and Asia, as well as the largest and growing consumption market in that country. He points out that the airport there is free from congestion and is open for development and expansion.

He says that ABC’s decision to introduce hub operations at Sheremetyevo Airport in 2009 had resulted in significant growth of cargo throughput, allowing the airline, which handles the Volga-Dnepr Group’s scheduled air cargo services operation, to optimise aircraft utilisation.

It also allowed ABC to maximise its load factor and strengthen its leadership in Russia’s air freight market, realising efficiencies of scale and taking advantage of its geographical location without extension in total transit time, he says.

Song says that ABC will take delivery of its tenth B747 freighter in July 2010, to boost its ‘cargo supermarket’ strategy of offering various aircraft to meet the different customers’ needs in the market.

Last year, despite the global recession, ABC handled several projects using the combined capability of its AN-124, B747 and IL-76 freighters in the Volga-Dnepr group’s fleet.