In an exclusive dialogue with Air Cargo Update’s Associate Publisher, Poonam Chawla, Dr. Raman Kumar, the pioneering Managing Director of Al-Futtaim Logistics, reveals the company’s groundbreaking strategies and its ascent to the zenith of industry excellence.
As the MENA region catapults onto the global stage as a pivotal player in air cargo, Dr. Kumar’s insights offer a captivating glimpse into the future of logistics. From cutting-edge 5G tracking systems to AI-powered document processing, Al-Futtaim Logistics is harnessing state-of-the-art technology to navigate the complexities of a post-pandemic world.
New Markets for Aerospace
How is the MENA region emerging as a key player in the global air cargo industry?
The air cargo industry is at a transformative juncture. Digitization, e-commerce and sustainability will remain pivotal in shaping its future. Companies that embrace these trends and invest in innovative solutions will lead the way.
The MENA region is on the cusp of becoming the epicenter of global air cargo operations. Airlines like Emirates, Qatar Airways and Saudia Cargo are driving this growth, supported by the region’s strategic location.
The geographical advantage allows for swift connections between Asia, Europe and the Americas. Goods often transition from sea to air in this region, facilitating rapid delivery to destinations worldwide. For example, Saudi Arabia’s central position enables quick deliveries to key markets within hours.
Visions like Saudi 2030 and the UAE’s development plans underscore the region’s potential. With strategic investments and advancements, the MENA region is poised for remarkable growth in the air cargo sector.
In 2025, we are expanding our aerospace logistics services to KSA, Kuwait and Oman and will be offering customers time critical freight and local services solutions. Over time, we have gained momentum through client recommendations. The services we will extend in these new markets includes freight solutions for AOGs, time critical parts from MROs, airlines and part suppliers, overcoming uncertainties and designing custom solutions to respond to the aerospace client’s pain points.
Al-Futtaim Logistics, being part of one of the largest automotive conglomerates in the UAE – Al-Futtaim Automotive, is poised to spearhead this charge into a more interconnected, efficient and sustainable future.
Secure Aerospace Logistics
Dr. Kumar, Al-Futtaim Logistics has recently secured the prestigious ASA-100 accreditation. Can you elaborate on the significance of this achievement?
Securing the ASA-100 accreditation is nothing short of a prestigious moment for Al-Futtaim Logistics. This accolade propels us into an elite echelon, as one of only five 3PL companies globally to hold this esteemed accreditation. It’s not merely a feather in our cap; it’s a resounding affirmation of our unwavering commitment to excellence in freight handling and security standards in aerospace logistics.
Al-Futtaim Logistics’ compliance with ASA-100 standards includes meticulous documentation control to ensure traceability and accountability for all aircraft parts. Rigorous inspections are conducted on inbound and outbound shipments to identify and address any hazardous materials, suspected unapproved parts, or counterfeit components. When such items are detected, Al-Futtaim Logistics swiftly notifies clients and implements quarantine and segregation procedures to maintain safety and quality standards.
How will this accreditation impact your clientele and operational paradigm?
For our customers, it means they can trust us to handle their freight with utmost care and precision, especially when it comes to safety of parts and products. This certification ensures that we meet and exceed industry standards, providing our clients with peace of mind and reliable service. It instills an unprecedented level of confidence in our ability to handle cargo with surgical precision and utmost care. This isn’t just a seal of approval; it’s an ironclad guarantee of reliability and excellence, equipping us to tackle the most formidable logistics challenges.
In what ways does the ASA-100 accreditation align with Al-Futtaim Logistics’ overarching strategy?
The ASA-100 accreditation serves as the cornerstone of our forward-thinking strategy. In the dynamic realm of logistics, stagnation is tantamount to regression. This certification acts as a springboard for perpetual innovation. We are not content with merely maintaining
standards; we are committed to continually raising the bar. Our goal isn’t just to participate in the logistics industry; it’s to reshape its very foundations.
Last Mile E-Commerce
How have customer expectations and logistics evolved in e-commerce over the last five years?
E-commerce has undergone a rapid transformation. What previously took decades to develop now evolves within a few years. If companies fail to adapt swiftly, competitors will overtake them.
Think about how straightforward it is to order items from anywhere in the world and receive them within a week, something that was unimaginable just a few years back. Today, this has become the norm, all thanks to improvements in last-mile logistics.
The global e-commerce companies have set new benchmarks by transitioning from e-commerce to becoming global logistics leaders. Their efficiency in digitization and innovation has become a model for others. At Al-Futtaim Logistics, we have introduced AI-driven solutions that automate document scanning and data extraction, reducing processing time from hours to minutes.
Last-mile delivery has also expanded from ground-based solutions to aerial logistics, showcasing the industry’s readiness to embrace innovation.
What role does collaboration play in shaping the future of the e-commerce industry?
Collaboration is essential for driving innovation in e-commerce. While e-commerce will coexist with traditional courier and logistics businesses, there will be a shift in balance. Traditional methods won’t disappear, as services like urgent shipments and fuel transport remain essential. Instead, the focus should be on fostering healthy competition and leveraging each company’s strengths to propel the industry forward.
Environmentally Conscious 3PL
Could you elaborate on Al-Futtaim Logistics team’s sustainability initiatives?
Sustainability is a cornerstone of our operations, aligning with the UAE’s net-zero emissions goal by 2050 and Al-Futtaim’s internal targets. We address sustainability through controllable and non-controllable factors. For instance, while we rely on shipping partners for fuel emissions, we actively manage our fleet operations.
Our initiatives include transitioning vehicles to biofuels like B5 and B100. The latter uses sustainably sourced raw materials, significantly improving our net-zero score. Additionally, we have incorporated electric vehicles (EVs) and hybrid trucks into our fleet to further reduce emissions. To validate these efforts, we have partnered with Green Freight Asia for sustainability audits. After a rigorous three-year process, we are nearing the highest possible sustainability score. These efforts reflect our commitment to regulatory requirements and actionable sustainability targets.
Digitization
How is digitization transforming the cargo industry?
Digitization is streamlining operations and reducing manual processes in the cargo industry. We at Al-Futtaim Logistics have implemented digital initiatives like Yard Management System for better automotive logistics operations, leading to increased productivity. The adoption of digital technologies has enabled real-time ocean container tracking and improved communication between stakeholders in the supply chain.
Digital solutions are providing better visibility across the supply chain. Freight forwarders can now collect and analyze vast amounts of data about shipments, carriers and markets, leading to better decision-making in pricing, routing and risk management. Al-Futtaim Logistics has deployed new technologies in their systems for contract logistics, general transport and last-mile deliveries, increasing transparency in the entire supply chain.
The industry is moving towards paperless operations, with innovations like the electronic Bill of Lading (e-BoL) reducing administrative burdens, eliminating manual errors and accelerating the documentation process. Digitization is enabling freight forwarders to provide better customer service. Al-Futtaim Logistics’ e-commerce logistics platform offers last-mile delivery, assembly services and shipment tracking, prioritizing customer convenience.
What are the key challenges in the implementation of digitization?
One of the biggest challenges is the lack of standardization across the industry, making it difficult for businesses to exchange information and connect electronically. There is also a lack of integration between different software systems, hindering a complete view of the supply chain.
Implementing digital solutions requires significant investment in time and money, which can be a barrier for small and medium-sized businesses. The industry needs to adapt to and effectively utilize new technologies. This includes training staff and updating existing systems to work with new digital solutions. With increased digitization comes the need for robust cybersecurity measures to protect sensitive data and ensure compliance with privacy regulations.
While digitization presents challenges, Al-Futtaim Logistics is embracing these changes to improve its operations and service offerings. The industry as a whole is moving towards a more digitized future, with the potential for significant improvements in efficiency, visibility and customer satisfaction.
The logistics landscape is undergoing a seismic shift. How is Al-Futtaim Logistics staying ahead of the curve?
The world has significantly changed, especially after COVID, emphasizing the importance of adopting digital solutions. Consumers now demand instant availability of goods, whether essential items or aerospace components, pushing for seamless logistics.
In aviation, supply chain efficiency has become critical. We are not merely adapting to change; we are orchestrating it. Our advanced 5G-compatible tracking systems and AI-driven document processing are revolutionizing our modus operandi. We are transmuting raw data into actionable insights, slashing processing times from hours to mere minutes. This digital metamorphosis isn’t just about enhancing efficiency; it’s about redefining the boundaries of possibility in logistics.
What has been the biggest impact of digitization on your operational ecosystem?
Digitization has impacted us in many ways. First, it has increased operational costs. However, this is offset by improved resource planning and operational efficiency. Integrated systems ensure seamless data flow without manual intervention, streamlining the supply chain for customers and us.
About Aerospace Logistics at Al-Futtaim Logistics
| · Headquartered in the UAE
· Established in 1980 · Airside operations in major UAE airports · 24 x 7 AOG operations · ASA-100 accredited 3PL services · 65+ aerospace network member and 300+ stations · Own aerospace hubs in Saudi Arabia, Kuwait and Oman by 2025 · Centralized aerospace services, with global coverage and dynamic freight, haulage and storage solutions · Technicians Onboard Charters (TOC) · Winner of Emerging Aerospace Logistics award |
For more information on services, please contact contact@aflogistics.com
Amsterdam, Netherlands: Air cargo’s strong seasonal fourth quarter (Q4) appears to have peaked, with tonnages and rates dropping slightly in the second full week of December, including from Asia Pacific origins, according to the latest figures and analysis by WorldACD Market Data.
WorldACD said the figures were based on more than 500,000 weekly transactions, thanks to the addition of four new air cargo airline participants in December to its global database.
Following several weeks of consecutive week-on-week (WoW) rises, average spot rates from Asia-Pacific origins dropped by around -4% in week 50 (9 to 15 December), compared with the previous week, to US$4.57 per kilo.
That fall in prices from Asia-Pacific origins was offset by a +6% rise from North America and a +5% increase from Middle East & South Asia (MESA) origins, together leading to a worldwide -1% WoW dip in spot rates overall.
Nevertheless, compared with last year, average global spot rates in week 50 this year were +16% higher, at $3.20 per kilo, driven by a +60% year-on-year (YoY) rise from MESA, a +14% increase from Asia Pacific, +13% rise from Europe, and +8% rebound from North America origins, plus small increases from Africa and Central & South America (CSA).
Average worldwide contract rates also recorded a small (-1%) WoW decrease, to $2.61 per kilo, generating a similar -1% drop in overall worldwide air cargo prices to $2.78 per kilo, based on a full-market average of spot rates and contract rates – but around +6% higher, YoY.
Demand decrease
With worldwide air cargo capacity stable, WoW, in week 50, as a -1% drop in worldwide freighter capacity was balanced out by a +1% increase in passenger belly capacity, the changes in spot prices broadly reflected variations in demand.
Overall worldwide tonnages fell by -1%, WoW, with a -2% drop in tonnages from Asia-Pacific origins and a -7% fall from MESA origins offset by a +4% tonnage increase from Africa and +2% rise from CSA, boosted by rising seasonal shipments of perishables northbound from those southern hemisphere markets – for example, from Egypt to Europe.
Asia Pacific individual markets
Examining the WoW performance of various key Asia Pacific outbound markets in week 50, individual spot rates from Asia Pacific to the USA, and from China to the USA specifically, edged up slightly higher, WoW, to $6.94 and $6.98 per kilo, respectively.
And compared with last year, Asia Pacific to USA spot rates in week 50 are slightly (+4%) higher, YoY, although China to USA rates are down by -7%, YoY.
Meanwhile, chargeable weight in week 50 from Asia Pacific and China to the USA was down, WoW, by -5% and -4%, respectively. But compared with last year, tonnages from Asia Pacific to the USA are +5% higher, while from China to the USA only slightly higher (+1%).
From Asia Pacific to Europe, all of the big origin markets recorded significant WoW drops in tonnages in week 50, including WoW falls of -10% from Vietnam, -9% from Thailand, -8% from Hong Kong, -6% drops from both China and Japan, and a -4% WoW drop from South Korea.
But compared with last year, volumes from most of those markets are significantly elevated still in week 50 of this year, including a +26% YoY increase from Japan, +23% from China, +19% from Vietnam, and +15% from Hong Kong.
And the picture is similar on the pricing side, including WoW declines in week 50 to Europe from Taiwan (-11%), Japan (-7%), and China (-5%), although spot prices from Hong Kong to Europe remain stable at close to their 2024 high of $6.21 per kilo.
But YoY, spot prices from all those major origin markets to Europe are significantly higher in this year’s week 50, including a +63% YoY rise from Thailand, +40% increase from Taiwan, +28% increase from Vietnam, +25% from Japan, +16% from South Korea, +13% From China, and +7% from Hong Kong.
With United States Postal Service (USPS) as one of its largest customers, United Cargo operates 4,000 flights daily in the US for domestic mails alone and an additional 1,500 flights for international routes. While the majority of its air cargo services are provided to commercial businesses, freight forwarders, logistics firms and national postal services, the company is eyeing a global-connectivity expansion, mainly through Southeast Asia.
By Mohammad Laique Khan
United Cargo, the airfreight division of United Airlines, the largest airline in the world, continues to be the leading US-based air cargo belly-carrier, transporting billions of cargo-ton miles annually to hundreds of global destinations across six continents.
Focusing on quality, innovation and customer satisfaction, the cargo carrier is an industry trailblazer, tranforming air cargo for the better, especially for best value.
Jan Krems, President of United Cargo, shares his insights about the company’s missions, innovations, sustainable and flexible solutions as well as smart technologies that help businesses, communities and economies meet the challenges of today’s more globalized digital world.
Krems is responsible for all aspects of United Cargo’s operations, customer service, sales and marketing activity, revenue management, product quality, and technology solutions. Prior to this position, he was with Air France-KLM-Martinair Cargo for 27 years, climbing up the corporate ladder to reach the role of Vice President Americas, where he was responsible for the company’s operations, customer service and sales in North America, South America, Latin America, Canada and the Caribbean.
Krems is an economics graduate from Utrecht University in the Netherlands with a post-graduate degree in marketing. Under his leadership, United Cargo is eyeing expansion on emerging markets while leading United Airlines’ air cargo division in spearheading a more modernized industry.
Read on the rest of Air Cargo Update’s interview with Krems, the air cargo and logistics expert, who enjoys growing grapes and turning them into wine.
Could you please provide an overview of your role at United Cargo and your key objectives for the company?
I am Jan Krems, President of United Cargo. Over the past three decades, I have had the privilege of working in the dynamic world of air cargo and logistics. My passion has always been about connecting people, businesses, and communities through innovative and reliable supply chain solutions. In my current role, I am responsible for all aspects of United Cargo’s operations, customer service, sales and marketing activity, revenue management, product quality, and technology solutions.
At United Cargo, our primary goal is to be profitable and customer-focused. We are committed to doing the right thing and providing a high-quality product. A major part of our strategy is ensuring that 50% to 55% of our shipments are specialty products. By focusing on specialty products, we create stronger relationships with our customers—because when you offer something unique, customers are less likely to switch for a small price difference.
Quality is a top priority for us. We strive for excellence in everything we do, and the feedback we receive from our customers reflects that commitment. Moreover, safety is equally important in all aspects of our operations. Our ultimate goal is to be the best value cargo carrier in the world. We are already the biggest, and we are focused on maintaining that position while continuing to grow.
The US market has undergone significant changes over the years. What opportunities do you foresee in the coming years?
That’s a big question, and it depends heavily on global developments. For instance, we need to watch what happens politically and economically. I don’t know what direction policies will take once there is change of government in the White House. The state of key shipping routes, such as the Red Sea or the Panama Canal, could also significantly impact ocean freight. Strikes and disruptions in freight logistics are another factor to consider.
As for e-commerce, while I recognize its importance, it’s not our primary focus. With the resources and capacity we currently have—especially on routes like Asia—I prioritize serving existing customers. Their satisfaction globally takes precedence, and only if there’s extra capacity do we accommodate e-commerce in future.
Pharmaceuticals, on the other hand, are a core focus for us. We maintain strong relationships with shippers to better understand their needs and ensure they are aware of what we can offer. However, we don’t deal directly with shippers when it comes to rates and agreements. Instead, we operate through forwarders or triangular agreements. Building strong communication with shippers is still critical because mutual understanding helps us evolve and serve them better.
Growth in the US market is definitely achievable, but it varies regionally. Some months, the East Coast performs better than the West Coast, or the Midwest outpaces the South. There’s untapped potential across all these regions.
Domestically, we also focus on opportunities like e-commerce and partnerships with entities like the United States Postal Service (USPS), which is one of our largest customers. For domestic mail alone, we operate 4,000 flights daily, with an additional 1,500 flights for international routes.
Being the largest airline in the world, our responsibility is to connect all key points globally and fill the gaps effectively to maintain and grow our market position.
What are the key emerging markets for United Cargo?
Asia is definitely a growing market for us. Before the pandemic, we were running about 14 flights a day out of China, but now it’s down to around 14 a week, mostly due to the political tensions between the Chinese and U.S. governments. Hopefully, things will improve soon.
However, we have seen progress in some Asian markets. For example, we are back to flying to Hong Kong four times a week and Taiwan twice a day, and our operations in Korea are also up and running. That said, we are always looking for more capacity.
Other strong markets include Vietnam and Thailand. We are making interline deals with other reputable carriers that share our approach and values, but instead of SPA agreements, these are more about capacity agreements. These agreements allow us to send cargo from those markets to the U.S. and bring shipments to our hubs, like in Japan. We have got 14 flights a day to Japan, and from there, we can route cargo to the US.
As for freighters, we don’t actually own any, but we do lease capacity. For instance, we have a freighter flying between Newark and Tel Aviv for a customer, and another flying from Colombia to Miami and Bogota. We also have a dedicated APA freighter that makes daily trips to Micronesia carrying mail. These flights are scheduled, but again, we lease the freighters, we don’t own them.
Can you elaborate on the recent innovations, products, and solutions United Cargo has introduced to meet the evolving demands of the market and sustain growth in the cargo sector?
United Cargo has been focused on aligning its innovations and solutions with the evolving needs of the market. For example, in pharmaceuticals, we have prioritized having the right infrastructure, such as temperature-controlled facilities at all our airports, specialized containers, and well-trained teams to handle sensitive shipments.
In terms of connectivity, we have been enhancing our direct customer interactions and improving host-to-host capabilities. Our booking platform has significantly advanced, and we are collaborating with platforms like Cargo.One and WebCargo to strengthen our digital presence. Interestingly, we also realized that because we were slower to adopt full digitalization, many of our customers still appreciate the direct, personal interactions we provide.
We handle about 2 million bookings annually. For smaller shipments under 100 kilograms, automation is key to simplifying the process. Pre-allocated bookings make up 25%, while another 25% involves more complex shipments that require personalized attention. This balanced approach ensures efficiency and customer satisfaction.
While we initially lagged in digitalization, I have come to realize it gave us the opportunity to refine our strategy, adapt thoughtfully and align our approach with what our customers really value.
Among all verticals, which would you consider the most effective or strategic to focus on?
For us, the pharmaceutical vertical stands out. It’s where we excel and lead by a significant margin. When we engage with our customers—like Pfizer, for example, which is a major partner of ours—we focus on building and maintaining strong, collaborative relationships. In this case, we work closely with our forwarders to ensure seamless operations and mutual satisfaction.
This partnership with Pfizer is more than just a business transaction; it’s a long-term alliance built on trust and mutual dependency. Neither of us can simply walk away—it’s a synergy that’s designed to thrive over time.
Could you share your achievements in digitalization so far? Additionally, how do you envision progressing toward your goals in this area?
We have made some solid progress in 2024 and plan to build on that momentum in 2025. That said, we are mindful of our limited resources, so our pace has to be measured, and we can’t take on everything at once.
Our team has been doing a fantastic job ensuring we stay on track with our digitalization efforts. While we are not leading the field just yet, we are focused on making thoughtful, strategic decisions that align with what’s feasible for us. It’s about finding the right balance and seeing what works best given our current capacity.
With such a wide range of verticals and significant cargo volumes, how do you collaborate with airports and logistics partners to address infrastructure challenges?
Collaboration is a key focus for us. We have strong partnerships with our joint venture allies, like ANA— though their merger with NCA has temporarily put some initiatives on hold. Similarly, with Lufthansa, we seek opportunities to align operations. Recently, we have been working very closely with Emirates, particularly in the pharmaceutical segment, identifying ways to combine our strengths effectively.
Beyond airlines, we actively partner with all stakeholders at airports. This includes trucking firms, handling providers, sales teams, and other key players. Our approach ensures that all parts of the supply chain are interconnected and operate as one integrated system to avoid any gaps or disconnects.
Could you share the sustainability initiatives undertaken by United Cargo?
Sustainability is at the heart of United Cargo’s operations. Our focus on initiatives like Sustainable Aviation Fuel (SAF) reflects our commitment to reducing carbon emissions in a meaningful way.
For our CEO, sustainability isn’t just a buzzword or a marketing tactic—it’s a fundamental part of how we operate. He truly believes in leading the charge to make United Cargo a carbon-neutral organization. While many companies set ambitious goals for the future, we focus on practical, collaborative actions that involve every part of the logistics chain. It’s not just about airlines or forwarders; everyone has a role to play in creating a cleaner, more sustainable world.
At United Cargo, sustainability is more than a program; it’s a value we embody. With genuine dedication, we work tirelessly to advance these initiatives, not as a promotional tool, but as a heartfelt commitment to creating a cleaner, better future.
How do you collaborate with stakeholders to ensure adherence to regulatory and safety standards across all operations worldwide?
We have dedicated teams focused solely on safety, compliance, and our safety management system (SMS). Regular interactions with regulatory bodies like the FAA and DOT are a key part of this process. In fact, sometimes we have more team members dedicated to safety and compliance than we do to sales. It’s a daily commitment for us. Within United Cargo, entire teams are tasked with ensuring we stay on track with all safety and regulatory requirements. We maintain ongoing discussions with these authorities to make sure we are always doing the right thing.
What do you see as the most significant opportunities and challenges facing the air cargo industry in the coming years, and how is United Cargo preparing to address them?
The air cargo industry faces numerous challenges and opportunities, and staying ahead requires a firm focus on maintaining quality and adapting to global dynamics. For instance, geopolitical issues, such as restrictions on flight paths—like the inability to fly over Russia en route to India—add significant costs to operations.
Environmental concerns, such as the impact of global warming, are another pressing issue. Additionally, trade policies, including tariffs introduced during past administrations, continue to influence global logistics.
A long-standing challenge within the industry is addressing inefficiencies in booking systems. It’s perplexing that customers can book shipments and fail to show up without financial consequences. This has been an unresolved issue for years. Attempts to address this in previous roles faced pushback because not everyone in the industry was willing to adopt such policies, leaving us isolated in our approach.
Despite these challenges, United Cargo is in a strong position. The company is highly supportive of its cargo division, granting us the flexibility to innovate and pursue new strategies. This collaborative environment makes me optimistic about the future and confident in our ability to navigate the evolving landscape of the air cargo industry.
Could you share some insights into United Cargo’s upcoming plans or initiatives that particularly excite you?
We are expecting a new plane every three days over the next six years, which is incredibly exciting for us. Although there were some setbacks with the strikes and issues at Boeing, those are behind us now, so things should improve going forward.
We will be adding a lot of 737 Maxes, Airbus A321 Neos, and Boeing 787s to our fleet. From a cargo perspective, this is fantastic news. United Cargo is determined to be not only the biggest but the best, and especially the best. We are deeply customer-focused, with a strong emphasis on safety and service. It’s truly a pleasure to be part of a company that’s so dedicated to its customers, both in passenger and cargo services.
How do you view the Middle East market? While you currently don’t have regular flights to the region, you do operate some services—could you elaborate on your experience?
Yes, we do operate flights to Dubai, though it’s more of a one-off situation—we have flown there three times so far in the past. Then, of course, COVID hit, and everything changed. Despite that, I’m happy to report that we are currently performing about 40% better than before the pandemic – which is something not many airlines can claim.
As for the Middle East market, we have been keeping an eye on it. Unfortunately, there’s been some unrest in the region, so we had to make adjustments. For example, we were flying to Amman, but then had to cancel those flights. We also used to fly three times a day to Tel Aviv, but we had to stop those due to the unrest.
We are definitely keen to return to Dubai, ideally with three daily flights, but we will need to assess the situation before making any decisions. Ultimately, we are excited about the potential to elevate Dubai’s connection with the Middle East, and we are really eager to work closely with Emirates to explore how we can develop a stronger, more impactful partnership.
While there’s a significant focus on the growing Southeast Asian market, how do you view the potential of the African market?
Yes, we are also focusing on the African market. We already fly to various destinations there, and we are looking to expand further with more routes. However, it’s often more passenger-driven than cargo, so we are constantly looking for ways to balance that.
That being said, I believe Africa will see more growth in the future. As we continue to increase our capacity and get the planes we need, we will be able to scale up. It may take some time, but Africa is definitely a key part of our growth strategy moving forward.
Geneva, Switzerland: The International Air Transport Association (IATA) says the total global air cargo demand, measured in cargo ton-kilometers (CTKs), rose by 9.8% compared to October 2023 levels (10.3% for international operations) for a 15th consecutive month of growth.
The rising demand was complemented by a drop in fuel costs, generating more profits for the air cargo industry. “Air cargo profits grow as fuel costs continue to drop. In October, average global jet fuel prices rose by 4.4% from the previous month, marking the first increase in three months. On the other hand, in YoY terms, they dropped by 25.7% YoY, the fifth consecutive decrease, settling at USD 89.8 per barrel on October 31,” IATA noted.
IATA, which represents 330 airlines, comprising over 80% of global air traffic, said capacity, measured in available cargo ton-kilometers (ACTKs), increased by 5.9% compared to October 2023 (7.2% for international operations), largely driven by an 8.5% increase in international belly capacity. Dedicated freighter capacity increased by 5.6%, the seventh consecutive month of growth with volumes nearing 2021 peak levels.
“Air cargo markets continued their strong performance in October, with demand rising 9.8% year-on-year and capacity up 5.9%. Global air cargo yields (including surcharges) continue to rise, up 10.6% on 2023 and 49% on 2019 levels. While 2024 is shaping up to be a banner year for air cargo, we must look to 2025 with some caution. The incoming Trump Administration’s announced intention to impose significant tariffs on its top trading partners—Canada, China and Mexico—has the potential to upend global supply chains and undermine consumer confidence. The air cargo industry’s proven adaptability to rapidly evolving geopolitical and economic situations is likely to be tested as the Trump agenda unfolds,” said Willie Walsh, IATA’s Director General.
Several factors in the operating environment should be noted:
October Regional Performance
Asia-Pacific airlines saw 13.4% year-on-year demand growth for air cargo in October. Capacity increased by 9.3% year-on-year.
North American carriers saw 9.5% year-on-year demand growth for air cargo in October. Capacity increased by 5.8% year-on-year.
European carriers saw 7.6% year-on-year demand growth for air cargo in October. Capacity increased 3.9% year-on-year.
Middle Eastern carriers saw 4.5% year-on-year demand growth for air cargo in October. Capacity increased 0.8% year-on-year.
Latin American carriers saw 18.5% year-on-year demand growth for air cargo in October, the strongest growth among the regions. Capacity increased 5.8% year-on-year.
African airlines saw 1.6% year-on-year demand growth for air cargo in October, the slowest among regions. Capacity increased by 7.7% year-on-year.
Trade Lane Growth: International routes experienced exceptional traffic levels for the fifth consecutive month with a 10.3% year-on-year increase in October. Airlines are benefiting from rising e-commerce demand in the US and Europe amid ongoing capacity limits in ocean shipping.
Latin America’s top cargo carrier is repositioning its brand while enhancing customer experience. With global imports cargo markets on recovery thread, it expects better results year-on-year.
“Avianca Cargo operates one of the most extensive networks in the Americas, with approximately 220 weekly freighter flights and over 1,400 passenger flights. The network spans more than 70 destinations across 24 countries in the Americas and Europe, including key markets such as the United States, Colombia, Brazil, Chile, Argentina, Ecuador, Spain, the United Kingdom, and France. As for upcoming developments, Avianca is actively exploring new markets to further enhance its connectivity and strengthen its leadership in the cargo sector.”
By R. Chandrakanth
Avianca S.A, the flag carrier of Colombia, since 1919 (though registered under the name SCADTA) is the second largest airline in South America, after LATAM of Chile, having an extensive network of destinations in the Americas.
But it is the cargo subsidiary – Avianca Cargo – which is doing exceedingly well, having established itself as one of the top six cargo airlines in the world. It is no mean achievement.
Avianca Cargo offers over 220 dedicated cargo flights and more than 1,400 flights with belly cargo capacity. With 70 interline agreements, the airline reaches over 200 markets globally. It currently operates a modern fleet of seven A330 aircraft, with ambitious growth plans including the addition of three A330 P2F planes.
This expansion strengthens their capacity to serve key markets while maintaining operational efficiency. Miami is one of their largest cargo hubs where they continue to consolidate their dominant position by operating 60 weekly freighter frequencies and 64 under belly operation, all out of this important gateway.
Ahead of the Air Cargo Forum in Miami, the Vice President of Cargo Development, Avianca Cargo, Diogo Elias, talks exhaustively to Air Cargo Update about how Avianca has become a favorite cargo airline from Latin America.
At this year’s ACF event, Avianca will be announcing its new brand repositioning, understanding and reaffirming. “Our purpose of doing is our customers and everything that matters to them,” said Elias.
Showcasing at ACF
“This time, after successfully concluding a turnaround strategy that started three years ago, we are proud to see how this effort has paid off, and our customers worldwide are now able to perceive us as an airline that have set bases for consolidation in terms of network and fleet reliability, a more robust value proposition, infrastructure expansion, seamless internal processes, and cost efficiency. We are proud to be among the top three international cargo airlines operating to and from Miami International Airport (MIA),” Elias explained.
Adding, “Our direct services connect Miami with key destinations across Latin America, including Colombia, Ecuador, El Salvador, México, Chile, Argentina, Brazil, among others. On a weekly basis, we handle an average of 2,100 tons of exports, 3,000 tons of imports, and 400 tons of transit cargo to and from Miami. Our inbound shipments to MIA primarily consist of perishables with over 80% and outbound we transport technology, e-commerce, among others.”
Here’s the rest of Air Cargo Update’s interview with Avianca Cargo, one of the world’s busiest airfreight carriers with approximately 220 weekly freighter flights and over 1,400 passenger flights. Its network spans more than 70 destinations across 24 countries in the Americas and Europe.
You have invested in infrastructure expansion in Miami, adding 83% additional capacity – tell us what is your capacity utilization and plans to increase it?
According to our commitment to achieve the highest service levels in one of our largest and busiest hubs, we invested in our facilities and processes to increase capacity and improve time efficiency. During the previous Valentine’s season, we announced an investment in our temperature-controlled facility to increase our handling capacity to 83%.
In general terms, in Miami, on the last year we invested in our infrastructure, improving our delivery times up to 20%. Additionally, we implemented advanced technology for pallet movement within cold rooms. This system enables more efficient flower handling with less effort and resistance, minimizing the impact on the boxes and ensuring better preservation of the flowers. We also invested in a Jet Floor expansion in Bogotá, reducing perishables cargo exposure to ambient temperatures by 40%, which contributed to improved handling efficiency.
Transportation of flowers, key to Avianca
“Avianca Cargo has held leadership, consistency and expertise in flower transportation for more than 50 years of presence in this important market. Over the years, we have proven to customers and other third parties that we are a market reference for confidence by:
▪ Establishing long-term partnerships with our customers amidst seasonality, with a steady and regular capacity offer during pre and post seasons.
▪ Doubling our regular freighter capacity at every peak season.
▪ As a leading carrier of perishables in the region, we are proud to be a top carrier for the largest flower exporting markets worldwide (Colombia & Ecuador). Proving our continuous commitment in handling storing and transporting perishable cargo under the highest industry standards, while recognized worldwide as being the first carrier in the region to obtain the IATA CEIV Fresh Certification.
▪ Working closely with governmental authorities and other third parties, ensuring the end-to-end experience is seamless from all the stakeholders’ interactions within the value chain.
Are you working at a new record in flower processing and delivery times in the coming season?
Currently, we operate 48 frequencies with a capacity of over 3,000 tons per week, and our aim is to continue implementing the best practices to enhance our performance and provide our clients with the highest level of service.
Regarding our processes, we achieved record performance through meticulous planning involving all stakeholders. This successful season was marked by exceptional teamwork and coordination with local US hub customer authorities, including Customs and Border Protection, to review itineraries, identify peak periods, and proactively organize processes.
As a result, we saw a 40% reduction in breakdown time last year, which includes unloading flowers from aircraft, depalletizing them into individual boxes, inspecting for quality, and transferring them to temperature-controlled storage or refrigerated trucks. Overall, our delivery time improved by 20%.
We are currently implementing a new truck dock management system through our allies, allowing clients to coordinate and schedule appointments in real time, reducing waiting times and improving tracking and visibility. Since the beginning of this year, our delivery process in Miami has been 100% paperless, enhancing control and traceability. Additionally, we implemented a Truck Appointment Management System in Bogotá, reducing paper usage by 30% and cutting waiting times for cargo delivery by almost 60%. We are also activating this system in Medellín for the upcoming season to further optimize our operations.
With your expertise in the flower supply chain, are you also looking at other flower exporting nations, if yes, which ones?
In addition to Ecuador and Colombia, we also export flowers from San José (SJO), Guatemala City (GUA), and Lima (LIM). We are continuously exploring new opportunities in other flower-exporting nations to further diversify our supply chain and meet growing market demands.
Given that over 50% of cargo transported consist of flowers, fruits, vegetables, meat and other perishable goods, isn’t it skewed in favour of perishable goods and with that you carry enormous risk?
What constitutes the other 50%? Latin America is by nature a highly concentrated perishable export market. Being a leading operator in the region and while the demand for perishable goods continues to be relevant in global trade, strengthening our product portfolio with these will still be part of our strategy.
Within the perishable markets, there is room for diversification. Our product portfolio has a strategic combination of perishables from different countries, such as salmon from Chile, fruits from Brazil, Colombia and Central America, flowers from Ecuador, the berry and cherry season from the south, seeds, and vegetables, among others.
Additionally, the other 50% mainly consists of General Cargo (30%), which includes, for example, textiles, auto parts, medical equipment and e-commerce. We also transport dangerous goods (10%) and special products (10%), which include pharmaceuticals, AVIs, human remains, and valuable goods.
With demand for lithium going up exponentially, how have you positioned yourself in connecting the markets? Could you give some figures on lithium carried by Avianca Cargo?
Indeed, the recent demand surge of lithium has brought Latin American countries such as Bolivia, Argentina, and Chile into the global spotlight as these allocate the largest reserves identified worldwide, and at Avianca cargo we are positioning towards it.
So far, we have captured more than 30% increase in Sep’24 versus last year in the transportation of lithium batteries. As an IATA CEIV lithium-certified operator and connecting to global manufacturing regions through gateways such as Miami (MIA), Los Angeles (LAX) and Madrid (MAD), Avianca cargo keeps committed to support lithium industry growth under the highest standards of quality, service, and safety.
Combining our freighter operation with belly capacity, we operate +20 weekly frequencies from Santiago de Chile (SCL), +30 from Buenos Aires (EZE) and +20 from Bolivia (La Paz – LPB and Santa Cruz de la Sierra – VVI), and our plans going forward points for a continue capacity growth effective Q4’24 and beyond.
What was the overall cargo tonnage carried in 2023 and what do you estimate to be end of 2024?
Air cargo traffic in 2023 was still marked by an industry yield contraction—the return to pre-pandemic levels—and load factors down from the effect of capacity increase and demand year-over-year decline versus 2022. As consequence, Avianca cargo ended with over 430,000 tons transported, a -5% versus 2022. 2024 started with a recovery in worldwide volumes, yet Latin America started to capture from that momentum from 2H’24 onwards, therefore, our estimation for this year is to close in line with last year’s results in tons transported.
You have three Airbus A330 on order, could you tell when they are likely to be delivered, will they be available for the Valentine season? Also, what kind of capacities will the three aircraft add to Avianca?
As part of our expansion plan, we enhanced Avianca cargo’s fleet with the addition of +3 A330-300/200 P2Fs. We looked for an integrated network and fleet expansion strategy aimed at delivering value to our customers and meeting their preferences.
The first P2F joined our commercial partner AeroUnion fleet recently in July and represented a 60% increase in capacity vs the previous aircraft. By 1H’25 we will receive 2 more A330-P2F, and these are expected to be available by Mother’s Day Season. This focus lies in presenting a robust proposal with a clear product offering, high service levels, and other attributes highly valued by the customers. A330s are more fuel efficient than their counterpart, it has better volume payload and volume capacity than other medium-size WB while still allowing for flexibility in medium-range routes.
Cargo revenues have seen a dip of 6.7% decrease in second quarter of 2024 (despite doing about 300 cargo flights in a short window), is the competition really hotting up from Latin America?
Early 2024, we evidenced an overall recovery in global cargo markets, mostly from Asia Pacific and Middle East driving the demand surge. Yet, momentum in Latin America started stronger by Q3’24 with a lower growth compared to other regions, since the largest long-haul markets from United States to South America were still contracted.
In addition, the freighter capacity remained up versus 2019 while passenger widebody continued the recovery path by then. All these, impacted industry load factors and Latin America’s yields at a worst level compared to other global markets, explaining the decline of cargo revenues in second quarter 2024 versus 2023. By Q3’2024, Latin America’s imports cargo markets recovery, mostly from e commerce, will contribute to better results year-over-year and versus 1H’24.
What is the present cargo network like and the new markets Avianca will be connecting in the near future?
Avianca Cargo operates one of the most extensive networks in the Americas, with approximately 220 weekly freighter flights and over 1,400 passenger flights. The network spans more than 70 destinations across 24 countries in the Americas and Europe, including key markets such as the United States, Colombia, Brazil, Chile, Argentina, Ecuador, Spain, the United Kingdom, and France. As for upcoming developments, Avianca is actively exploring new markets to further enhance its connectivity and strengthen its leadership in the cargo sector. These initiatives aim to expand the reach of its network, enabling more efficient logistics solutions across additional regions.
You have entered into partnerships with several GSAs in different countries, could you walk us through some key partnerships and the projections of cargo you are likely to be carrying?
For the past year, we began the process in which we worked around our objective of rapidly expanding our global footprint by restructuring our network of GSA in record time across countries like the United States, Chile, the Netherlands, Belgium, India, Japan, China, among others. New highly qualified partners such as ATC Aviation, HIT Cargo, Hermes Aviation, ECS Group, GSA Force, and GOCargo, who share Avianca Cargo’s values, have been selected to ensure a coordinated sales approach in various markets with their expertise, dynamism, proximity, and rigor.
Tell us how your partnership with Turkish Cargo is going? Will you be entering into any other tie-ups with other cargo airlines?
A year after signing the memorandum of understanding (MOU) in April 2023, we proudly announced the launch of a new service between Liège and Miami. This initiative represents a significant milestone in our ongoing efforts to create synergies and explore opportunities for mutual growth. With this new service, we have enhanced cargo connections between the regions, providing customers with increased capacity and access to a more extensive and interconnected global network.
Through our partnership with Turkish Airlines, we connect to a network of over 340 destinations. Our primary focus is on establishing connections with Asia and other regions where we currently do not operate. Additionally, we aim to integrate various points into our network, such as linking Europe to our key locations.
Tell us the kind of investment you have made in digitalization and how it has helped in cargo movements?
We are deeply committed to expanding our digital booking channels to improve accuracy, reduce confirmation times, and enable our clients to plan, confirm, and manage reservations digitally 24/7. In 2024, we undertook several key projects to enhance our digital capabilities. One of our significant initiatives is Qanty, our truck turn management system implemented in Bogotá and Medellín. This system optimizes cargo delivery times for our customers, ensuring more efficient operations.
We also achieved a milestone in Marketplace Integration. Avianca Cargo became the first airline to connect with all three major cargo marketplaces—CargoAI, cargoONE, and WebCargo. This integration allows us to offer 100% of our routes for GCR cargo, significantly expanding our reach and service capabilities.
Through Airblox, we utilize an online marketplace to exchange cargo capacity via electronic block space agreements (eBSAs). This platform enables us to offer over 280 flights for the next two months, providing greater flexibility and options for our clients. Our CargoWise Integration spans six countries: Panama, El Salvador, Brazil, Colombia, Ecuador, and the United States. This integration streamlines operations for over 25 key cargo agents, enhancing our overall efficiency and service delivery.
Additionally, our partnership with DB Schenker marks a significant achievement. Avianca Cargo became the first airline in South America to implement an integrated system with DB Schenker, which enhances operational efficiency and coordination. These initiatives not only strengthen our operational efficiency but also position us as leaders in digital innovation within the cargo industry.
Participating in freight marketplaces, how has that helped Avianca Cargo, can you quantify?
Sales through digital channels experienced significant growth of 55% in the last quarter compared to Q2. These channels are primarily leveraged in Europe, which accounts for 78% of the total sales generated through this platform. However, we are actively working to increase this figure by encouraging broader adoption of digital channels across other regions, aiming to further optimize our sales processes and enhance customer experience globally.
Where does Avianca Cargo see itself by 2030?
Our vision with Avianca cargo is to position it as a leading cargo operator in the region and be the preferred cargo carrier within Latin American markets, by 1) offering a consistent network with the most modern medium sized cargo fleet; 2) robust customers’ value proposition; 3) driving a process simplicity organization and 4) maintaining cost efficiency as a priority. We are still on our path towards that goal, while we have started achieving a market consolidation that is being recognized by our customers worldwide.
Dubai, UAE: Nearly 30 percent of Dubai’s GDP in 2023 came from aviation and the sector is seen to have a greater impact on the city’s economy with 185,000 jobs it will generate by 2030, apart from 631,000 jobs it currently supports, bringing to 816,000 the total number of people it will employ by then.
In a joint economic impact study compiled by global research firm Oxford Economics, Emirates Group and Dubai Airports jointly pointed out that aviation, along with tourism that it supports, contributed AED 43 billion (USD 11.8 billion) to the local economy in 2023. Within seven years or by 2030, its GDP contributions is expected to grow by more than 40%.
Quantifying aviation’s contributions and forecasting the sector’s upwards trajectory, based on financial and passenger growth projections for the sector, Oxford Economics, assessed direct economic activity generated by the aviation sector, indirect activity generated through the sector’s supply chain, and induced activity supported through wage-funded consumption by the local aviation workforce. The study also assesses the catalytic impact of tourism spending facilitated by the aviation sector in Dubai.
His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline & Group, and Chairman of Dubai Airports said: “Under the leadership of HH Sheikh Mohammed bin Rashid Al Maktoum, Dubai’s aviation sector has been a core pillar of our city’s economic growth strategy to date, and it will continue to play a key role in the D33 Economic Agenda.
“Supported by strong air connectivity, Dubai has a prominent presence on the global stage for trade, investments, tourism, and is a leading player in aviation and logistics. Our ambitious plans for Dubai World Central – Al Maktoum International airport, and our ongoing investments to expand capacity at Dubai International, will unlock further economic opportunities by supporting the projected demand for air transport. Our growth plans will generate even more skilled jobs, and also help drive innovation as we work with leading technology partners to develop future solutions to enhance travel experiences and make operations more efficient and secure.”
Aviation sector’s contribution to Dubai economy
In 2023, Dubai’s aviation sector, consisting of Emirates Group, Dubai Airports (including Dubai International and Dubai World Central – Al Maktoum airports), and other aviation sector entities are estimated to have supported AED 137 billion (USD 37.3 billion) in gross value added² (GVA), equivalent to 27% of Dubai’s GDP.
This included the core economic impact of AED 94 billion, and AED 43 billion from the catalytic impact of aviation-facilitated tourism. These figures are projected to increase steadily, with aviation activities facilitated by Emirates and Dubai Airports contributing AED 196 billion, or 32% of Dubai’s forecasted GDP by 2030 (in 2023 prices).
Aviation-led activity also accounted for 631,000 jobs across Dubai, equivalent to one in five jobs in the emirate in 2023. A further 185,000 aviation-linked jobs are expected to be created by 2030, with the total number of jobs supported by Dubai’s aviation sector forecast to grow to 816,000 jobs.
A previous economic impact report released by Oxford Economics in 2014 found that the aviation sector contributed to 27% of Dubai’s GDP and supported 417,000 jobs. While the latest results indicate the share of Dubai’s GDP has remained stable, the sector’s gross value added has increased in real terms, with the current figures reflecting faster growth across other sectors, as well as diversification in the wider economy over the past decade.
Dubai’s vital investment to futureproof its aviation sector and ensure it remains an economic driver, is evident in ongoing major investments to expand capacity and operations at Dubai International, in addition to a new generation facility at Dubai World Central – Al Maktoum International. The new AED 128 billion airport will be five times the size of Dubai International, with the first phase to be completed in 10 years. When fully completed, Dubai World Central – Al Maktoum International will consist of over 400 aircraft stands, with capacity to serve 260 million passengers annually. The expansion of Dubai World Central – Al Maktoum International is not included in the study’s main impact results3; however, the construction project is expected to contribute an estimated AED 6.1 billion to Dubai’s GDP in 2030, as well as support 132,000 jobs.
The new airport and surrounding infrastructure will contribute to Dubai’s Economic Agenda (D33), which aims to strengthen the emirate’s trade and tourism footprint. D33’s progressive development plans also seek to make Dubai one of the most connected cities by adding 400 destinations to its foreign trade map, in addition to making it one of the top five logistics hubs in the world.
Aviation and tourism in Dubai
Aviation is also the driving force behind the growth of international tourism to Dubai. As one of the most frequented destinations in the world, visitors stayed an average of 3.8 nights in 2023, spending an average of AED 4,300 on hotels, restaurants, attractions and shopping. According to the report, international visitors flying to Dubai spent an estimated AED 66 billion last year.
In total, aviation-facilitated tourism spending is estimated to have contributed: AED 43 billion in gross value added, or 8.5% of Dubai’s GDP, supporting 329,000 jobs. More than half of GVA, AED 23 billion, was generated by those flying to Dubai with Emirates. Tourism to Dubai is projected to grow significantly over the next six years, with aviation-facilitated tourism spending expected to support AED 63 billion in gross value added, equivalent to 10% of Dubai’s projected GDP, as well as one in eight Dubai jobs.
The full Oxford Economics report ‘The Economic Impact of Aviation In Dubai’, can be found here.
With the demand for cargo services continuing to rise, Silk Way West Airlines has positioned itself as a key player in the global logistics sector. The airline has placed orders for eight new Boeing freighters, including the world’s largest and longest-range twin-engine freighter, the Boeing-8, marking its commitment to operational efficiency and sustainability. This strategic move ensures that the airline stays at the forefront of environmentally sustainable operations while responding to market demands with greater capacity and improved efficiency.
In an exclusive interview with Air Cargo Update at the Air Cargo China 2024 event, Wolfgang Meier, President and CEO of Silk Way West Airlines, shared insights into how the cargo carrier from the Caspian region has distinguished itself from its competitors. Mr. Meier discussed the airline’s strategic expansion plans, its focus on sustainability, and its vision to be the leading “Ambition Movers” from Azerbaijan.
Defining an “Ambition Movers”
When asked about the meaning of “Ambition Movers,” Mr. Meier explained that the tagline reflects the airline’s internal and external drive to capitalize on growth opportunities. The concept of “Ambition Movers” resonates with the idea of progress and leadership, highlighting Silk Way West Airlines as a company that drives ambition, not just for itself, but for its customers and stakeholders. This also reflects the company’s strategic role in bridging Eastern and Western markets through its Baku hub, ensuring that the airline plays a pivotal role in shaping the future of global logistics. It suggests that the airline plays an active role in moving the ambitions of businesses across the globe, which aligns perfectly with its mission of connecting the East and West. The philosophy behind this concept is to inspire employees and partners alike, creating a culture that thrives on innovation and a forward-thinking approach. Over the last 12 years, Silk Way West Airlines has leveraged this mindset to achieve impressive growth, currently operating hundreds of flights monthly across Europe, Asia, and the Americas and handling over half a million tons of cargo annually.
One of the most notable recognitions of this success came in 2020, when Silk Way West Airlines was awarded the prestigious title of “Cargo Airline of the Year” by Incheon Airport. This award recognized the airline for achieving up to 25,000 tons of international cargo turnover and excelling in operational performance on its routes to South Korea.
Phase-Out of Older Aircraft Models
Growth must be sustainable and profitable, according to Mr. Meier. To align these goals, Silk Way West Airlines has embarked on an ambitious fleet renewal program, phasing out older aircraft and replacing them with more fuel-efficient models. “We began re-fleeting last year, and this process will continue over the next six to seven years,” Mr. Meier shared.
The airline has already ordered six Boeing 777 freighters, two of which are currently in service, with four more expected to join the fleet in the near future. Additionally, the airline has placed orders for two Airbus A350 freighters and two Boeing 777-8 freighters, which are set to be delivered by 2030. The choice of these aircraft reflects Silk Way West Airlines’ commitment to both expansion and environmental stewardship. The incorporation of these advanced models will not only increase the airline’s operational efficiency but will also contribute to its long-term sustainability objectives.
Sustainability at the Core
Sustainability is at the heart of Silk Way West Airlines’ operational strategy. As part of its fleet renewal efforts, the airline is focused on incorporating the latest aviation technologies that directly reduce emissions and improve fuel efficiency. Mr. Meier highlighted the importance of utilizing modern aircraft, noting that the new Airbus A350F, for example, boasts 20% lower fuel consumption and CO2 emissions compared to older models. Similarly, the Boeing 777-8F, the world’s largest twin-engine freighter, reduces fuel use by 30% and operating costs by 25%.
In addition to upgrading its fleet, Silk Way West Airlines has made significant strides in embracing Sustainable Aviation Fuel (SAF). SAF has the potential to reduce the airline’s carbon footprint even further, contributing an additional 1-2% reduction in emissions. “Our sustainability approach is pragmatic,” Mr. Meier stated. “We focus on immediate actions that deliver measurable results.” These efforts, combined with the airline’s commitment to fleet renewal, underscore its long-term dedication to sustainable growth.
Moreover, Silk Way West Airlines’ commitment to sustainability is not limited to its fleet. The airline recently joined the United Nations Global Compact initiative, which solidifies its pledge to integrate sustainable and ethical business practices into its core operations. As part of its broader ESG (Environmental, Social, and Governance) strategy, the airline is also heavily involved in community-driven initiatives in Azerbaijan, contributing to educational programs, infrastructure projects, and environmental conservation efforts. This move ensures that the airline’s sustainability strategy aligns with global benchmarks and the United Nations Sustainable Development Goals (SDGs).
Strategic Partnerships and Global Connectivity
At the Air Cargo China 2024 event, Silk Way West Airlines signed a Memorandum of Understanding (MoU) with China Henan Aviation Group. This strategic partnership aims to enhance air cargo connectivity and efficiency between Zhengzhou and Baku, creating a dual-hub model that spans the Asia-Pacific region and connects Europe, America, and Africa. The partnership represents just one of the many ways in which Silk Way West Airlines is expanding its global network.
By forming such alliances, Silk Way West Airlines can tap into new markets and leverage the strengths of its partners, further solidifying its position as a key player in the global cargo industry. This approach also supports the airline’s broader strategy of increasing efficiency across its operations, whether through optimized routing or improved supply chain management.
Resilience in the Face of Market Fluctuations
The global cargo industry is not without its challenges, and Silk Way West Airlines has certainly faced its share of market volatility. However, the airline has demonstrated remarkable resilience. In 2023, despite a challenging year for the industry as a whole, Silk Way West Airlines managed to transport over half a million tons of cargo, reflecting the company’s strong market position and adaptability.
“While last year wasn’t the best for the industry, we took it in our stride and stayed focused on our goals,” Mr. Meier remarked. This attitude of perseverance has enabled Silk Way West Airlines to weather difficult market conditions and emerge stronger, reinforcing its role as a trusted carrier for global clients.
Focused Growth and Niche Strengths
When discussing the competition, Mr. Meier acknowledged that Silk Way West Airlines is smaller compared to some of its global rivals. However, the airline has successfully carved out a niche in key vertical markets such as oil and gas. “The Caspian region is our home, and we see this as a competitive advantage rather than a limitation,” he said. This regional strength, coupled with the airline’s focus on specialized industries, has allowed Silk Way West Airlines to differentiate itself from its competitors.
Rather than attempting to compete in every market, Silk Way West Airlines is selective in its approach. For example, the airline has deliberately chosen not to enter certain markets that are already highly competitive. Instead, it focuses on regions and sectors where it can offer unique value and capitalize on strategic opportunities.
A Roadmap for the Future
In conclusion, Mr. Meier outlined Silk Way West Airlines’ roadmap for the future. “We will continue to grow moderately, expand our networks strategically, and enhance our operations with a modernized fleet,” he said. This balanced approach to growth, combined with a strong emphasis on sustainability and efficiency, positions Silk Way West Airlines as a key player in the global cargo industry.
By aligning its growth strategy with sustainable practices and leveraging strategic partnerships, Silk Way West Airlines is well equipped to navigate the evolving landscape of global air cargo. As the airline continues to expand, its focus on operational excellence and environmental responsibility will undoubtedly play a pivotal role in its ongoing success.
We are the smaller fish among the huge pond. But we have our own niches. The Caspian region is our home turf. It is considered as our backyard market, not in the negative sense but as a positive point. We are in competition with the global players, being placed advantageously geographically and strong in verticals such as oil and gas. We are not shying away from competition.
Wolfgang Meier
President and CEO
Silk Way West Airlines
Silk Way Group’s 3 main pillars at a glance
Silk Way Group was established in 2006 to manage freight operations from Heydar Aliyev International Airport in Baku. Over the years, Silk Way Group expanded to include a number of subsidiaries active in the aviation industry as well as in other sectors. At the end of 2019, a strategic decision was taken to focus on freight transportation, and following a process of divestment of non-core activities, the group was consolidated into three companies engaged in cargo aviation and related services: Silk Way West Airlines, Silk Way Airlines, and Silk Way Technics.
Silk Way West Airlines
Founded in 2012 in Baku, at the heart of the Silk Road, Silk Way West Airlines operates hundreds of flights every month across the globe via its fleet of 12 dedicated Boeing 777F, 747-8F, and 747-400F aircraft based at Heydar Aliyev International Airport.
In line with its commitment to sustainability and efficiency, Silk Way West Airlines plans to renew its fleet with eight new state-of-the-art aircraft by 2030, including four Boeing 777F, two Boeing 777-8F, and two Airbus A350F, to better meet global logistics demands. The airline offers comprehensive cargo services to over 40 global destinations across Europe, the CIS, the Middle East, Asia, and the Americas, managing an annual cargo turnover exceeding 500,000 tons.
Silk Way Airlines
Silk Way Airlines was founded in 2001 and operates charter flights to Europe, the Middle East, Asia, and Africa. The Silk Way Airlines fleet consists of five latest-generation Il-76TD and Il-76 PS-90 aircraft, certified to fly anywhere in the world. The airline also provides transportation for the UN and the ISAF (International Security Assistance Force) programme.
Silk Way Technics
Silk Way Technics was founded in 2006 and specializes in aircraft maintenance. The company has the largest hangar in the region, as well as state-of-the-art equipment, and holds certificates of compliance with international standards for the maintenance of a wide range of aircraft, including Airbus, Boeing, Embraer, and Gulfstream models. It should be noted that the highly qualified staff of Silk Way Technics provide technical services not only for Silk Way Group and Azerbaijan Airlines (AZAL) aircraft, but also for other airlines from the CIS, Europe, and the Near East.
Paris, France: SATS Ltd, one of the world’s largest providers of air cargo handling services, has signed a three-year agreement with the International Air Transport Association (IATA) to expand the rollout and implementation of DG AutoCheck compliance solution for the safe handling and transportation of dangerous goods shipments at key stations across its international network.
This follows SATS’ acquisition of Worldwide Flight Services (WFS), a global leader in cargo handling, further strengthening its global footprint.
The expanded agreement will facilitate the adoption of DG AutoCheck at both existing and new stations across the combined SATS and WFS network, which now operates over 215 stations in 27 countries. This extensive network handles trade routes responsible for over 50% of global air cargo volume, enabling SATS to play a crucial role in ensuring the safe transportation of dangerous goods.
“SATS is proud to have signed the first global agreement with IATA to implement DG AutoCheck across our network as part of our commitment to the highest standards of aviation safety and security. We commend IATA for this initiative which is helping to maximise safety and improve efficiency by ensuring clear compliance and visibility of dangerous goods shipments moving by air cargo,” SATS’ Henry Low stated.
DG AutoCheck is an automated compliance solution that optimises dangerous goods acceptance processes to ensure the highest level of safety. Developed in collaboration with airlines, ground handlers, and freight forwarders, it replaces manual cross-references of the Shipper’s Declaration for Dangerous Goods (DGD) and IATA’s Dangerous Goods Regulations (DGR) to help eradicate the chances of errors that may lead to shipment rejections, fines, and penalties for non-compliance.
“We are pleased to support SATS and WFS in the expanded implementation of DG AutoCheck across their global network. This solution significantly enhances the safety, accuracy, and efficiency of dangerous goods handling, which is critical as air cargo volumes continue to grow. SATS’ commitment to adopting innovative safety measures sets a strong example for the entire industry,” David Wall, IATA Director of Safety and Cargo Compliance & Operations Solutions.
The certificate handover from David Wall, Director Safety and Cargo Compliance & Operations Solutions at IATA to Henry Low, SATS’ Chief Operating Officer and CEO-designate Singapore Hub* happened on 27 September in Paris.
Airlines, freight forwarders, and cargo handlers manage the transportation of over 1.25 million dangerous goods annually, and this is forecast to grow by a further 4.9% in the next 5 years, according to the Association.
Using DG AutoCheck, IATA says cargo operations teams can:
IATA says DG AutoCheck users have reported up to a 50% reduction in processing time and a reduction in errors compared to manual processing.
Photo caption
David Wall (right), Director Safety and Cargo Compliance & Operations Solutions at IATA, handing over SATS’ DG AutoCheck certificate to Henry Low, SATS’ Chief Operating Officer and CEO-designate Singapore Hub.
Qatar’s national freight carrier is a game-changer when it comes to global humanitarian and animal rescue efforts. Its vision is clear—continue growing its business with massive investments in technologies and aircraft, while giving back to the world in its own little way.
The world’s aviation landscape has changed phenomenally with the dominance of the three Middle East carriers, known in aviation circles as ME3 (Qatar Airways from Qatar and Emirates Airline and Etihad Airways from the United Arab Emirates). They continue to excel even as they compete fiercely, the end result being unmatched service for the paying customer and powering the Middle East increasingly to become ‘The Aviation Hub’.
This tag does not come easily. It has strong foundations in how the Middle Eastern airlines, particularly the ME3, have imbibed business planning, work ethic, professionalism, investment in people and technologies, and above all taken the right approach, the right mindset, leveraging their ‘right location’ on the East-West axis.
Caring Airline
In this cover story, Air Cargo Update focuses on one critical aspect of the airline business – cargo – and how Qatar Airways Cargo tops the charts, perfecting the business of moving goods, animals and everything possible that needs to be transported by air. The highlight here is the primacy that Qatar Airways Cargo gives to humanitarian relief, setting aside revenue interests, and also in moving ‘endangered’ animals, an exemplary example of a caring airline.
In May this year, Qatar Airways Cargo, in coordination with Animal Defenders International (ADI) transported six young lions from the illegal wildlife trade, taking them safely to the ADI Wildlife Sanctuary in Johannesburg. Transportation of live animals by air may appear a walk in the park, but it isn’t. It requires a top-notch airline’s expertise and highly-skilled cargo specialists.
Genuine Care
Qatar Airways Cargo digs deep into its reserves, not just ensuring seamless transportation, but also seeing that the animals are not stressed and have a comfortable and relaxing journey. There is extensive planning, perfect coordination between different stakeholders, there are also standard operating procedures that are followed to the ‘T’, and there are professionals who genuinely care.
Heading the team of cargo professionals is Mark Drusch, its Chief Officer Cargo. Replacing Guillaume Halleux who left the role in September 2023, Drusch has been in the hot seat since January 31, 2024, a newbie in the cargo business, but an experienced and thorough airline management professional, whose stint as Senior Vice President, Revenue Management, Alliances and Strategy at Qatar Airways for almost 4.5 years, catapulted him to a higher role – to take the cargo business to the next level.
In fact, he states he was pleasantly surprised when the top management of Qatar Airways asked, ‘Why don’t you head Cargo?’, a division which was running excellently well and during the Covid pandemic had done some exceptional work of moving medical supplies around the world.
“Though I have been in airline operations for many years, I did not have detailed understanding of the cargo market. Yet, Qatar Airways management was clear in its thinking of not bringing someone from another cargo airline and change things that were going smoothly. The management was firm on inducting someone from within, someone who knew how Qatar Airways functioned and someone who could take the cargo business to the next level,” said Drusch.
“I had worked closely with all the colleagues during the pandemic and had built partnerships across the group, but I never ever considered the position, until they brought it up. I thought the offer was cool because it was an area that I was new to and that newness, the intellectual stimulation and the need to learn something new, excited me. I have been in Qatar Airways Cargo for six months now and I am absolutely loving it.”
Complex Cargo Operations
Drusch acknowledges that the cargo operations are far more complex and intricate business than the passenger side. “It is intellectually stimulating and the problems and solutions are far more complex and even faster paced. “I have been fortunate to be in a well-run organisation and the expert cargo team has been generous in educating me and helping me to understand the business, while accepting my perspectives. It has been a great experience for me. I am enjoying the hell out of it.”
At the June 2024 Air Cargo China in Shanghai, Drusch and his team were present, showcasing the strengths of Qatar Airways Cargo.
In conversation with Israr Ahmed of Air Cargo Update, Drusch explained how Qatar Airways Cargo had carved a niche for itself in moving live animals and also how it was in the forefront of carrying humanitarian relief, working in partnership with the UNHCR, the UN Refugee Agency, since 2020 and was ‘keen on doing more for refugees.’
Commitment to return wildlife to their natural habitat
Asked about the challenges faced by Qatar Airways Cargo in transporting the young lions, Drusch explained, “It takes a lot of effort and logistics for our team to organise moving such large animals; from the logistics at the airports, loading and unloading the animals from the aircraft, to ensuring the correct cages and wellbeing of the animals are in place, but it is something we are all collectively very proud and passionate to be a part of.”
Qatar Airways Cargo’s ‘WeQare Rewild the Planet’ initiative is the airline’s commitment to returning wildlife and endangered species back to their natural habitat, free of charge.
There are many challenges and great airlines are built around those which take challenges head on. “As regards animal transportation, the number one challenge is getting all of the permits from the destination country, then comes ensuring veterinarians to travel with the wild animals which need to be handled properly. People are putting their personal time in it and I am proud of the team. We want to do more on this front. It is very close to my heart and thanks to my colleagues, we make it happen,” Drusch shared.
Under the ‘WeQare Rewild the Planet’ initiative, he adds, Qatar Airways Cargo has done Rhinoceros in the past. In 2018, it flew Eric, a 1,157 kilograms black rhino from San Diego Zoo in California to his new home in Tanzania, for the Singita Grumeti Fund, a non-profit organisation carrying out wildlife conservation and community development work in the western corridor of the Serengeti ecosystem in Tanzania. Tanzania’s newest resident, bred in the US was gifted to the United Republic of Tanzania by San Diego Zoo to bolster an important satellite population of critically endangered eastern black rhinos.
We are here to help
“We have not done as much as we had like to do,” Drusch states and adds, “Lot of zoos, animal parks and private owners do not know about our animal transportation. We are here to help. We want to do more of this. I am dedicated to do this.”
This kind of passion, this kind of commitment is not just from Drusch but the entire team at Qatar Airways Cargo which has the best state-of-the-art animal care facility in Doha. “I am really proud of the facility and how all my colleagues have put their everything, their understanding of what an animal goes through while travelling and taken care to make it stress-free and seamless travel for the animals. The idea is to give a calming experience to these animals whether it is horses, chicks, fishes, dogs, cats, falcons, reptiles or the wild variety. The pallets are cushioned and so are the stables for the horses. We even play music and our team is always working on finding out which music helps. As regards the facility, it is not just the biggest, but the best. We are focused on all aspects of quality animal care.”
There is no destination that Qatar Airways Cargo does not hesitate to transport animals, having 24/7 veterinarian service, capable of handling any situation.
Always Ready to Help UNHCR
On the geopolitical tensions around the world and the refugee-fallout, Drusch is kind of angry. “I don’t care about politics. The fact that millions of people are displaced as refugees, it is a global shame. Qatar Airways Cargo is committed to humanitarian relief. If the UN needs to get supplies to any part of the world, we will put on the plane tomorrow. We have a partnership with the UN and we have told them, you need help, just call us and we are there to help displaced people and refugees, whatever it takes us to do that. It’s a shame that children are going through such trauma. I don’t want people to suffer. I have told my team, if we need to take capacity out to help displaced people or animals, we will do it. It is our job to make money elsewhere. We will work extra hard to compensate by supporting refugees. That is my job and my team’s job.”
Coming to the cargo business, per se, Drusch mentions that the airline is seeing huge volumes of e-commerce, movement of high value cars, electronics, aerospace components, pharma, dangerous goods etc. “Mail is shrinking, while all other products are growing and I am not surprised.”
India’s Economic Miracle, Plans to Tap New Destinations
Awestruck by India’s economic performance, Drusch adds “I have no idea when the economic miracle in India will stop. It is growing rapidly. India is super strong both inbound and outbound cargo. Anything out of Asia, whether North or South Asia, trade is booming which is good for the industry. It has got so many pockets of strength right now and I believe that air cargo is a key factor in global trade. Because of air cargo and global trade, your life would not be what it is. You get things in 48 hours from anywhere in the world. The fruits you get here in winter, the incredible variety of vegetables in your grocery store would not be possible, if we weren’t bringing them from across the world. The salmon you get in Kuwait is from Norway, the pharmaceuticals in Chicago are from India, people don’t realise how air cargo has been significantly contributing to global trade.”
Exploring Secondary Markets
As the world’s leading international air cargo carrier, Qatar Airways Cargo serves an extensive network of over 60 freighter destinations and 170 passenger destinations utilising freighters and belly-hold passenger aircraft.
Continuing its market leader position, the airline is always looking at new markets in Latin America, in India, in Africa etc. “We are looking at new destinations in India, a country which is doing phenomenally well. India is well balanced in terms of inbound and outbound trade. Some markets in Asia are heavily outbound, while there is the mix category too. We are looking at Venice, Edinburgh, Hamburg, and destinations in Mexico etc, what we call secondary markets. We can go to Edinburgh directly without touching London, we can connect Venice without going to Milan.”
Shipping directly to these destinations makes a lot of sense, time and cost-wise to the freight forwarders.
Digital Footprint
It is not just destinations that Qatar Airways Cargo is interested in expanding, but also its digital footprint, making it easier for not just the company but also for the customers. “We lead the industry in terms of modernisation and digitalization. I want the average consumer to know the benefits of this. And there is so much more room for digitalization to grow. I am six months into the cargo segment and have got better sense what needs to be done as quickly as possible. We are refocussing the digital footprint and in the next 12 months, we should be able to roll out new features, leveraging the experiences and strengths of both passenger and cargo businesses,” Drusch said.
In India, the airline has selected Octoloop by Cargo Flash as its digital cargo booking platform via its wallet services, starting with Delhi and Mumbai. This partnership is set to revolutionize the cargo logistics landscape, offering streamlined operations and increased efficiency for Qatar Airways Cargo by giving opportunities to incremental freight forwarders to connect with Qatar Airways Cargo and take advantage of its air freight services on the airline’s extensive network.
Need to Invest More in Sustainability
With regard to sustainability, Drusch said the airline is clear in its vision of sustainable operations – it is two-pronged for the moment – in the short term, finding ways to reduce fuel burn on aircraft for which the airline is working hard, with partners, to find technologies. In the long term, the airline is in tandem with the State of Qatar which has taken the lead to produce sustainable fuels. “We are partnering with them and participating with them to help drive that goal. We are launching those first steps and we are cautiously optimistic of finding solutions in the next 10 years.”
On sustainable aviation fuel (SAF), Drusch feels that either more capital needs to be invested to expand the production or we have to find the right solutions. “Today one gallon of SAF costs me four times of a gallon of gas. Who is going to pay for that is the question. We really need to have better solutions. Forget moving fancy cars, we need to move pharma, vegetables, essential products, animals etc. We must have better solutions. We need to invest in the future.”
Quizzed about the status of the agreement Qatar Airways Cargo has signed with Dronamics, the world’s first cargo drone airline with a license to operate in Europe, Drusch mentioned that Dronamics was working on the certification while ‘we are working on the business plan’.
The interline agreement allows the extension of the delivery networks of both partners, significantly increasing their reach as well as providing access to areas previously hard to reach by traditional air freight. Through the agreement, Dronamics can offer cargo services from any of its droneports, initially in Greece, to the wider Qatar Airways Cargo network – including destinations such as Singapore, China, including Hong Kong, and the United States (JFK).
Qatar Airways Cargo has also launched Vision 2027, a roadmap that combines business-as-usual improvements and initiatives aimed at reshaping the future of air freight supported by close to 3,000 employees of the cargo carrier and its ground-handling partner, QAS Cargo.
Drusch concludes, “In the next four to 5 years, we have four broad goals to focus on – grow our fleet, including being the launch customer of Boeing 777X Freighter; massive investments in technologies (airplanes, warehouse design etc); build global partnerships; and give back to the world in our own little way.”
Geneva, Switzerland: Global air cargo markets showed continuing strong annual growth in demand, carried through July with 13.6 percent increase compared to the same period in 2023, according to the International Air Transport Association (IATA).
Total demand, measured in cargo ton-kilometers (CTKs*), rose by 13.6% compared to July 2023 levels (14.3% for international operations). IATA said this is the eighth consecutive month of double-digit year-on-year growth, with overall levels reaching heights not seen since the record peaks of 2021.
Capacity, measured in available cargo ton-kilometers (ACTKs), increased by 8.3% compared to July 2023 (10.1% for international operations). This was largely related to the growth in international belly capacity, which rose 12.8% on the strength of passenger markets and balancing the 6.9% growth of international freighter capacity.
It should be noted that the increase in belly capacity is the lowest in 40 months whereas the growth in freighter capacity is the highest since an exceptional jump was recorded in January 2024.
“Air cargo demand hit record highs year-to-date in July with strong growth across all regions. The air cargo business continues to benefit from growth in global trade, booming e-commerce and capacity constraints on maritime shipping. With the peak season still to come, it is shaping to be a very strong year for air cargo. And airlines have proven adept at navigating political and economic uncertainties to flexibly meet emerging demand trends,” said Willie Walsh, IATA’s Director General.
Several factors in the operating environment should be noted:
Asia-Pacific airlines saw 17.6% year-on-year demand growth for air cargo in July – the strongest of all regions. Demand on the Within-Asia trade lane grew by 19.8% year-on-year, while the Europe-Asia, Middle East-Asia, and Asia-Africa trade lanes rose by 17.9%, 15.9% and 15.4% respectively. Capacity increased by 11.3% year-on-year.
North American carriers saw 8.7% year-on-year demand growth for air cargo in July. Growth was hampered in part by flight cancelations and airport closures in the US and the Caribbean in relation to Hurricane Beryl. Demand on the Asia-North America trade lane, the largest trade lane by volume, grew by 10.8% year-on-year, while the North America-Europe route saw a modest increase of 5.3%. July capacity increased by 7.0% year-on-year.
European carriers saw 13.7% year-on-year demand growth for air cargo in July. The Middle East–Europe trade lane led growth, up 32.2%, maintaining a streak of double-digit annual growth that originated in September 2023. The Europe–Asia route, the second largest market, was up 17.9%. Within Europe also saw double-digit growth, up 15.5%. July capacity increased 7.6% year-on-year.
Middle Eastern carriers saw 14.7% year-on-year demand growth for air cargo in July. As mentioned above, the Middle East–Europe trade lane performed particularly well surging 32.2%, ahead of Middle East-Asia which grew by 15.9% year-on-year. July capacity increased 4.4% year-on-year.
Latin American carriers saw 11.1% year-on-year demand growth for air cargo in July. As with North American carriers, growth was hampered in part by flight cancelations and airport closures in the US and the Caribbean related to Hurricane Beryl. Capacity increased 9.4% year-on-year.
African airlines saw 6.2% year-on-year demand growth for air cargo in July – the lowest of all regions and their lowest recorded figure in 2024. Demand on the Africa–Asia market increased by 15.4% compared to July 2023. July capacity increased by 10.5% year-on-year.
Technology has made the world smaller and faster.Real time communication with people from all over the world at different time zones through phones and gadgets
