Finnair Cargo positioned for success

IN recent years very few European carriers have been adding freighter services, but one exception has been Finnair Cargo, which has operated an MD-11 freighter since August 2011.
Interestingly in an era where the growth of widebody belly capacity is often cited as making freighters uneconomical, it is just that factor that has helped sustain the Finnair Cargo operation.
With Finnair’s passenger services to Asia expanding, and the carrier planning to double the amount of revenue it gets from that region by 2020, Finnair Cargo is faced with extra belly capacity to fill out of Helsinki. Given that it takes two to three days to truck cargo from central Europe, a freighter feed is a viable alternative.
Freighter operations are not new to Finnair, but historically it has tended to buy block space on other carriers. It did this with Polar Air in the 1990s and took space on Emirates and Cargolux freighters to Asia in the years up to 2009.
In 2010, the carrier saw an opportunity as its MD-11 fleet – one of the last in passenger service – came up for retirement. Five of them were ultimately converted, and were sold to Nordic Global Airlines (NGA), a joint venture between Finnair Group, lessor Neff Capital Management, and other parties.
Today Finnair Cargo only uses one of these freighters, but has ad-hoc access to another if it needs it, and, says Juha Jarvinen, Finnair Cargo’s managing director, the medium term goal is to go back up to two. The other MD-11Fs owned by NGA fly from Belgium to Africa for various airlines.
Finnair Cargo’s original use for the freighters was to fly to New York once a week, and to various destinations in Asia. Seoul and Mumbai were both tried, but abandoned due to soft markets. Instead the freighter currently flies twice a week on a joint route to Hanoi and Hong Kong, one a week to New York, and twice each weekend to Brussels.
The latter service, started in April, "raised eyebrows" according to Jarvinen, but he says the result has been a steady improvement in the profitability of the Asian flights.
Read Peter Conway’s full interview in the next edition of Air Cargo News  10 February 2014  – Issue 770 


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