Saudia Cargo expects yield pressure to continue in 2016

Saudia Cargo believes further yield pressure and belly cargo capacity additions will be the main challenges faced by the air cargo industry in 2016.
Speaking to Air Cargo News, Saudia Cargo vice president commercial Rainer Mueller said: “For us as a true air cargo operator and running 16 freighters, the main challenge is the yield development,” he said. “We still expect further pressure on yields.”
“Secondly, it’s the belly cargo development that’s heavily impacting the freighter operators.
“But you can develop your own strategy to deal with. In the end, we have the number one freighter fleet in the Middle East.”
He added: “From my point of view, the passenger growth especially on the bellies is higher than the air cargo growth. That in the end has an impact on the yields and that also impacts the freighter programme.
“So you will see a growth on the bellies but when it comes to freighter operation, in the long term there is a question mark whether we will see growth in that sector as well.”
To meet the challenge, Saudia Cargo has been developing specialisations in certain products, such as its pharma offering, which was created in 2014.
At present it is concentrating on pharma imports in Saudi Arabia, which has a population of 30m, and is looking to develop temperature controlled facilities in the country.
It is also concentrating on developing services to final destinations where it can attract higher yield cargo.
With regards to its fleet, the two B777 freighters that were delivered over the last few months were the last on its orderbook.
Mueller said there are no immediate plans for further orders, but he added that the airline is always monitoring its network and will change aircraft where necessary.