Spirit of Panalpina under review

PANALPINA is reviewing the future of its Atlas freighter, the “Spirit of Panalpina”, because of the downturn and trends in the market.

The contract for the B747-400 freighter – which Panalpina has wet-leased direct from Atlas since the late 1990s – expired in late August, but has been extended till the end of 2009 while the forwarder assesses if it is worth continuing with it.

“We will look at how the market develops in the next two months, and see how we can best deal with the current situation,” says Robert Frei (right), Panalpina’s head of corporate airfreight. “This was the biggest single commitment our company ever made, so it needs to be carefully thought about. At the moment, it is very difficult to make long term commitments.”

‘Spirit’ flies for Panalpina from Luxembourg to Huntsville, Alabama four times a week, with two flights going on to Mexico and Guadalajara. But the automotive traffic that is one of the two core businesses for the service (the other being oil and gas shipments) has suffered a 40 per cent drop year-on-year. Capacity is also readily available on other carriers in the current downturn.

On the other hand, the US government’s August 2010 deadline for the screening of all belly cargo out of the US should favour freighter traffic, which has a less stringent security regime, Frei reckons.

“We will definitely continue with our own capacity to the US, that is for sure, but how we will do it is the question,” he says. “Do we enter another ACMI lease, or do we look at other options? That is what we are evaluating.”

Panalpina also works with carriers such as Cargolux, MK Airlines, China Airlines and Cielos de Peru to provide what it calls “own-controlled capacity”, but Frei admits this has shrunk to around five per cent of its total air cargo volumes, compared to around 10 per cent before 2008.

“We only use our own-controlled capacity to certain markets where commercial capacity does not meet our needs,” he says. “If we can get the capacity we need at the right rates, there is no need for us to make financial commitments or take a risk.”