Qatar Airways Cargo surges ahead
24 / 01 / 2014
WHEN he was chief executive of Cargolux you might have said that Ulrich Ogiermann had the dream job in air cargo. But now that he is chief officer, cargo, for Qatar Airways, a role he took up in November 2012, he is arguably in an even more exciting position.
At a time when cargo growth at many airlines is static or in decline, with freighter fleets being abandoned or cut, Qatar Airways is surging ahead on all fronts, and making big investments in both its cargo and passenger fleet.
“There is a completely different feeling in this part of the world,” Ogiermann says. “When I go to Europe it is all about trimming the business, reducing the cost base. But here it is about growth and putting the infrastructure in place to cope with it. So it is obviously very enjoyable to work in this environment.”
Qatar Airways Cargo currently serves 133 bellyhold destinations and 40 freighter ones. And counting. With a fleet of 128 aircraft and a new one arriving every 12 days on average, it is aiming for a fleet of nearly 200 aircraft in less than three years. That means the cargo team is kept busy opening up new markets, exploring new territory.
But how does it manage to fill all the new capacity and achieve double-digit growth, when the rest of the air cargo business - even the once rapidly-expanding Far Eastern carriers - are stagnant or even declining?
Ogiermann says there is no magic secret. “We are in the same market. We deal with the same forwarders and the same global accounts. Basically it boils down to being more competitive - on products, quality and prices - and maintaining positive interactions with our clients.”
As an example he cites perishables, where Qatar Airways has just invested in 30 new cool-trucks that pick up perishable shipments directly from the aircraft, or even sit on the tarmac keeping the cargo cold if the connection time is less than two or three hours.
Ogiermann says it is the only Middle Eastern carrier with such a capability, citing his own perishables manager - a former supply chain manager for renowned UK retailer Marks & Spencer - as saying it is the only carrier in the region to guarantee complete temperature control during transfers. This has opened up markets such as the transport of fruit, vegetables and flowers from Africa to Europe and the transport of fish from Europe to Asia.
Qatar has its geographical advantages, of course. “Having a hub in this location means that we can optimise flights on each different sector - the Indian Subcontinent, Asia and Africa,” Ogiermann says. “Loads are more balanced because we have a feeding/de-feeding point in the middle. We don’t have to hop around to different destinations on route, chasing cargo on the way.”
Such medium-haul cargo looks set to be even more of a focus at the carrier in future, if its recent order for five A330-200 freighters with eight options, is anything to go by. Qatar already has three of the type, which replaced three A300-600Fs in its fleet in early 2013, and the new order will make it the largest operator of the aircraft.
In a way, the carrier’s enthusiasm for the A330F is old news. A couple of years back, chief executive Akbar Al Baker was quoted as urging Airbus to launch a conversion programme for the aircraft, but when Airbus conversion arm EFW did that, orders were not forthcoming.
Ogiermann can cast no light on this choice. “As a business unit we are not involved in those decisions: we just flag up our needs and they give us the best available options”. But doubtless he will be very happy to have the superior range and pay-load of the factory-built freighter.
For many carriers, the rise in long-haul belly capacity is undermining the need for freighter operations. But Qatar Airways has no such doubts. “We need the freighters because passenger aircraft are deployed according to passenger needs, and those are not always the same as those as cargo,” he says.
He cites Middle Eastern routes on which Qatar Airways often operates narrowbodies. “The A330Fs are heavily deployed there at the moment, and we can even fly them to Paris or Madrid and still have full payloads,” Ogiermann says. “They are ideal for anything up to a range of five or six hours.”
Beyond that, or on larger volume routes – for example Hong Kong, Seoul, Frankfurt, Milan, Atlanta and Chicago – the B777Fs come into play. The carrier got its first one in May 2010, and now has five in the fleet. Three more are on order, with two to come next year.
This year will also see Qatar Airways get two new passenger aircraft types. Later in the year it will fly the first ever A350-900 – being the launch customer for this type with 43 -900s, 37 -1000s on order – and it will take delivery of the first of 10 A380s. The latter will provide relatively little cargo capacity, carrying as little as two tonnes per flight, however.
Another big development for the carrier during 2014 will be the long-awaited opening of the new Hamad International Airport in Doha. The exact date for this has not yet been announced, but cargo is ahead of the game, opening its new cargo facility at the airport on 1 December.
This massive building – two floors of 55,000 square metres, making it one of the largest cargo terminals in the world – is triple the size of the current facility, and represents an eye-watering US$1bn investment. Initially it is handling Doha exports only, with full cut-over due once the new airport starts passenger services.
Fully automated, with temperature-controlled unit storage, a 4,200-sq m animals centre, and a whole suite of perishables rooms that can be set at any temperature down to frozen, it will enable Qatar Airways Cargo to offer a new range of products.
One, launched from this month, is Q Pharma, its first ever pharma product, which has already been certified to meet the highest industry standards. Another is Q Fresh – a perishables product with fully defined processes and services.
With all of these developments, Qatar Airways is also finding time to push vigorously forward on e-freight. It was one of the first carriers to sign the new multilateral e-airwaybill agreement produced by IATA in March 2013, and it has since signed a global deal with a network provider in Singapore to pro-vide the communications technology necessary for the project.
In recent months it has also been driving up adopt-ion in its local market, increasing e-airwaybill penetration from 20 per cent in September to near 100 per cent by the end of December.
One might think that this would be an easy win, given that the carrier is fairly dominant in its home market but, as Ogiermann points out, it is not just a question of getting buy-in from local branches, but also from head-offices.
“Some forwarders are very keen and are investing a lot in this. But for others it is not such a priority,” he observes, adding that the latter category surprisingly includes some global names.
“There could be a stronger push from some forwarders. That is the main stumbling block now, because in technology terms, everything is in place and we have excellent support from the authorities.”