Qantas Freight expands its global reach

16 / 10 / 2013

  • Lisa Brock, executive manager of Qantas Freight

    Lisa Brock, executive manager of Qantas Freight

BIG CHANGES have been afoot in Qantas Freight. The division has changed its European strategy, bought out its partner in a domestic joint venture, and introduced new technology. And all this has been achieved in just one year.

One of the more surprising changes is that the European hub for Qantas Freight is now in Dubai. That is because in September 2012 the parent carrier announced a major re-alignment of its European business in the shape of a 10-year partnership with Emirates.

When this came into effect on 31 March, the carrier switched the intermediate stop on its two daily A380 flights to London – one from Sydney and the other from Melbourne – from Singapore to Dubai.

There, it not only has access to Emirates’ new all-A380 Terminal 3, but can offer connections to 65 destinations in the Middle East, North Africa and Europe. One-stop European connections were boos-ted from five to more than 30 by the deal, and the carrier says the first nine weeks it was in place saw a six-fold increase in Qantas’ passenger bookings to mainland Europe com-pared to the same period last year.

For cargo, the change is from trucking cargo to and from Frankfurt (where Qantas flights have now been discontinued) to having direct connections to destinations throughout Europe. The carrier has even relocated its Europe, Middle East and Africa (EMEA) manager to Dubai.

Lisa Brock, executive manager of Qantas Freight says that “Europe has become much easier for us now” as a result of the deal, adding that it has produced “lots of new opportunities”. Not all of those are west of Dubai. The carrier has also, for example, been moving cargo on Emirates services to Phuket to connect with its flights from there to Sydney.

It must help that an increasing proportion of the onward destinations Emirates can offer will be served by A380s. As one of the key operators of the aircraft, Brock pronounces it very satisfactory for cargo, noting that capacity is pretty similar to that of the B747-400s it rep-laced. It helps that Qantas’s configuration of the ‘planes is less passenger dense than on some other carriers.

Important though the Emirates deal is, however, Brock admits that having just two daily belly flights makes Qantas Freight something of a niche player in Europe. Far more important to the cargo business are its B747-400 freighter flights to the USA.

Since air exports from Australia are largely confined to perishables, with most of the demand being on the import side, Qantas flies its freighters eastbound via China. For example, two B747-400Fs a week go to Bangkok and Shanghai and on to the USA, and another – started in April 2012 – goes via Chongqing.

Once in the US, the freighters call at New York, Chicago and then Los Angeles before returning to Sydney via a tech-stop in Honolulu. They also fly round-trip flights from Sydney to both Hong Kong and Shanghai.

Qantas claims a five per cent share of the eastbound air cargo market between China and the US, but it is a market that has been get-ting tougher in recent years, as belly capacity across the Pacific has increased. Brock admits that there is such a trend, but says Qantas has no plans to change its freighter schedules.

The carrier did show some nervousness about the market recently when it cancelled plans to swop one of its wet-leased B747-400Fs for a dry-leased B747-400ERF. At the time it cited soft market conditions, and Brock has not changed her mind since. “We are not seeing any sign of recovery,” she says. “The IATA statistics are pretty flat, but we will see what happens in the peak.”

The idea behind the change to the ERF was to bring the freighter operations in-house by having the aircraft operated by Express Freighters Australia, the Qantas in-house freighter air-line that was created in 2006 to operate four B737-300Fs, converted from the Qantas passenger fleet, for domestic express operator, Australian air Express (AaE).

For 20 years, Australian air Express operated as a 50-50 joint venture between Australia Post and Qantas, effectively taking the place of a domestic cargo network. But in October 2012 Qantas bought out Australia Post’s share.

The result was that Qantas Freight has now finally been able to integrate the domestic express operation with its international cargo business. This has included closing AaE’s Melbourne headquarters and bringing its management into the Qantas Freight headquarters in Sydney.

“We now have a single sales team and a single call centre, and, later in October, we will be on a single IT system,” Brock says. “We’re now man-aging all the capacity as one, and there are huge opportunities around that.

“Exporters can come to us for a one-stop solution solving both their domestic and international needs. Before, we did sell domestic legs to international customers – for example Los Angeles to Perth – but there was a separate management team and separate standards in the two businesses.”

With the acquisition of AaE, the Qantas Freight all-cargo fleet now numbers 12 –three B747-400s, four B737-300Fs, three BAe-146s, a Saab-340 and a B767-300F.” The latter shuttles back and forth across the Tasman Strait linking Sydney to Auckland and Christchurch. Cargoes include overnight express shipments from distribution centres based in Australia that serve the New Zealand market, and perishables from New Zealand’s South Island.

In July, Qantas Freight also started a B737 freighter ser-vice between Brisbane and Port Moresby in Papua New Guinea – another example of the synergies that have arisen as a result of the Australian air Express purchase. In addition, the deal added int-ernational cargo terminals in Darwin, Cairns and Adel-aide (as well as numerous domestic facilities) to Qantas Freight’s existing portfolio of Sydney, Melbourne, Brisbane, Perth and Los Angeles, giving the carrier a commanding position in the Australian handling market.

On the belly cargo side, Qantas Freight has an expanding portfolio of Asian connections through its marketing of the capacity of Jetstar, the low-cost passenger subsidiary of Qantas. As well as the original Australia and New Zealand-based carrier, this also includes Jetstar Asia based in Singapore, with joint ventures in Vietnam, Japan and Hong Kong due to follow soon. While these are mostly A320 or A321 flights, the fleet does include 10 A330s that fly to such useful cargo destinations as Saigon, Bangkok and Hong Kong.

As if all this change has not been enough, Qantas Freight has also been pushing through technological improvements. One innovation that Brock is particularly proud of is the use of iPad-equipped kiosks to enable truck drivers to input the air-waybills of the shipments they are collecting and have that information communicated directly to forklifts in the warehouse. “Often the cargo is on the dock before they have got back to their trucks,” she says, adding that the service has been very well received by customers.

The Australian carrier is now looking at other ways to use tablets. “They are cheap, simple and really intuitive to use, and you can just put wifi in a terminal to communicate them. So we are definitely scoping for other app-lications for them.”

Brock also reveals that Qantas Freight is “pushing very hard” on e-airwaybills, with some 20-30 per cent of its shipments now employing them.

 

Asked for the secret to successful implementation, she says: “We are just working through, lane-by-lane and customer-by-customer, because it is often about local issues. The IATA multilateral agreement has been very important, a real facilitator.”