Malaysia Airlines - Orient Aviation

CARGO UPDATE
Asiana thinks big
By Charles Anderson
It’s tough sharing your home with the
world’s largest air freight operator,
but figures detailing Asiana
Airlines’ recent performance show
that while it is unlikely to ever
overtake Korean Air (KAL), the country’s
second carrier doesn’t plan to stay in big
brother’s shadow for long.
Its overall freight load factor (FLF) is
a healthy 80%, topping the average 64.4%
for the region’s carriers and is a few points
above KAL, according to Association of Asia
Pacific Airlines (AAPA) figures.
The f ig ure is surprisingly good
considering the capacity
coming into the North Asian
market. And a freight tonne
kilometre (FTK) increase of
19% last year was also the best
in the region.
The plan was to reach US$1
billion in freight revenue this
year, raise freight’s contribution
to the carrier’s overall profit
from 31% to 32% and to
be among the top 10 cargo
carriers in the International
Air Transport Association’s
FTK table by 2010, said an
Asiana spokesman.
KAL currently tops the
IATA list after knocking
Lufthansa German Airlines off its perch
in 2004. Asiana is 20th in the table, a good
position for a carrier that started full freight
operations with a single B747 in 1994.
The fleet has grown considerably since
then and is about to expand again. Three
B747 combis, being converted into full
freighters by Israel Aerospace Industries’
Bedek Aviation Group, are being added to
eight existing B747Fs and one B767F this
year as routes are expanded. Bellyhold cargo
makes up some 43% of the 900,000 tonnes
carried annually to 23 cities in 14 countries
on 25 routes.
India, the Middle East and Latin America
have been earmarked as areas with promise
to add to existing services to North America.
Transpacific business remains the most
important taking up 40% of Asiana’s freight
totals, with intra-Asia 30% and Europe 20%.
But it’s time to look elsewhere as well.
“We are definitely considering expanding
our routes to India in the future. In our mid
and long-term strategy we plan to start
service there with connections to China and
Europe,” said the spokesman. But first will
come a major boost in freighter services to
main Chinese cities from Korea, which will
see flights increased from three to 15 a week
by the end of the year.
After that there are plans to set up a hub in
an as yet unnamed mainland city – research to
establish the city is going on at present – and
once fifth freedom rights are secured Asiana
Asiana Airlines: bellyhold cargo accounts
for 43% of total freight carried
will to form a joint venture with a domestic
operator.
Korean Air already has an agreement in
place with state logistics provider, Sinotrans,
to form a Chinese freight operation, while
Lufthansa Cargo, Singapore Airlines, China
Airlines and EVA Air also have partnerships
in place.
A good portion of the China goods will
be flown to Incheon airport in Seoul, through
which Asiana transships 52% of its freight.
This figure should grow along with the
airport itself, which has ambitious plans
for further expansion of its cargo facilities,
especially in the transshipment area.
But with the Korean won gaining in
strength the dependence on shipping cargo
for domestic companies such as Samsung
and LG Electronics is causing some concern.
“Their relative importance has increased. We
are trying to lower this high reliance and
we are looking for niche markets in order
to accomplish a higher profit,” said the
spokesman. “This should help us with our
future balance of payments strategy.”
Asiana is also moving away from a
dependency on trunk and feeder routes.
“That system doesn’t guarantee satisfactory
results,” he said.
Instead the carrier is developing roundthe-world
flights and what it calls “absorption
routes” – connecting a number of different
places – which should attract more express
cargo.
Such tactics might also
help solve the inbound cargo
dilemma that all Asia-Pacific
carriers face when aircraft head
out of the region with heavy
loads – IT products, electronics
and textiles in Asiana’s case –
but return virtually empty. So
too could incentives being
offered to global forwarders
who hold the key to solving the
problem, said the spokesman.
Otherwise, Asiana tries to
bring back specialist items
such as cherries, tuna, flowers
and seafood from Nor th
America.
Last year load factors to
North America from Korea topped 85%
and to Europe they edged above 80%
thanks to delivery guarantees for specific
cargo arranged in advance, said the carrier.
Elsewhere, the picture wasn’t quite so healthy
with services to China recording 62% and
Japan 56%.
Meanwhile, Asiana is looking to join
regional and other alliances to help it beat
the competition.
Last year, it agreed to cargo code-sharing
with Japan’s All Nippon Airways on all
freight routes between the two countries,
which added four major Japanese cities to
its network.
That cooperation will likely be
strengthened by the equity swap between
the two carriers announced in June.
20 ORIENT AVIATION JULY/AUGUST 2007