AF/KL Balance China Traffic

     Air France-KLM Cargo plan a number of intermediate stops on routes between Europe and Far East.
     Turkish megalopolis Istanbul and Tashkent in Uzbekistan were named by Pascal Morvan, Senior Vice President Operations and Logistics AF-KL Cargo, as two prospective destinations.
     “With these stopovers we can reduce the imbalance of tonnage, seek new market possibilities in Central Asia and thus increase revenues,” stated Morvan.
     The imbalance of loads is a problem not only for the merged partners AF-KL but for European airlines in general, which complain about little tonnage en route to China, Korea or Taiwan with prices per kilogram nearly zero but full freighter and belly loads on their way back home.
     Since European carriers don’t possess inner-Asian traffic rights it is a clear disadvantage for AF-KL Cargo, LH Cargo, BA, and other contenders,
     Thus they cannot transfer their shipments at hubs like Hong Kong or Seoul and spread their goods around the region on board of their own aircraft, like Chinese, Japanese or Korean freight contenders can.
     As a consequence of this geographical disadvantage, LH Cargo founded Shenzhen-based carrier Jade Cargo International, which will start flying in summer, and Singapore Airlines came up with Great Wall Airlines that commenced service June 1, by flying Shanghai-Amsterdam six times weekly deploying two B747-400F’s.
     However, there are other locations of high interest for European freight carriers, as Morvan noted: “We very much look at Africa where both Air France Cargo and KLM Cargo are traditionally strong and where we plan to put more capacity in.”
     In the Sub-Sahara region the rates are still sane as prices per kilogram to Abidjan, Lagos, Niamey or Nairobi illustrate.
     In fiscal 2005 which ended March 31, AF-KL Cargo revenues increased by 11.9% to 2.88 billion euros.
     During that time 1.4 million tons were transported, a rise of 3.1% compared to 2004.
     However, the average load factor dropped by 1.8% to 66.1%.
     “This is something we’ll have to work on as well as the lowering of unit costs,” stated AF-KL Cargo Chairman Michael Wisbrun.
     Exact predictions were tougher to get but Wisbrun did say—“we expect the load factor to increase in 2006.”
AF Senior VP Sales & Distribution Jean-Charles Foucault pointed out that beginning next October a unified IT-System will be rolled out, internally called ‘Unique Voice Portal – UVP’.
     UVP will enable the sales staff a smooth entrance to both reservation systems, which AF Cargo and KLM Cargo will keep using for a while.
     “With UVP, our sales force can constantly monitor the available capacity on our aircraft making the booking of shipments more transparent and much easier,” said Foucault.
     He said that up to now the staff of 40 AF-KL Cargo stations worldwide already works under one roof in jointly used offices.
     This enhances the mutual understanding of different cultures and pushes productivity quite a bit, the manager emphasized.
Heiner Siegmund