Adrien Thominet is no stranger to the air cargo industry having spent more than 20 years of his career sailing through this tough and rough yet rewarding sector.
Thominet, the health-buff COO of ECS Group, a Paris-based leading General Sales and Service Agency (GSSA) providing complete cargo outsource solution with 69 subsidiaries and 128 offices across 47 countries dealing with more than 110 airlines, has every reason to be thankful for in 2016.
The year has been very good to the company marked with lots of acquisitions, new deals and contracts with airlines and firms in allied industries, across Europe, Latin America and Asia.
In July, ECS won two new GSSA contracts in Germany with DHL and Malaysian Airlines, which is setting up its cargo operations in the country.
“We’re quite happy this year because we have new contracts, new airlines and new acquisitions,” the French entrepreneur told Air Cargo Update in an interview in Paris on the sidelines of the Air Cargo Forum held in October.
This year, Thominet said ECS has extended its network to at least five countries in Latin America—Chile, Argentina, Colombia, Equador and Mexico.
“These are niche markets. Chile is booming and there are also opportunities in other Latin America countries,” he said.
Additionally, the company was awarded the contract to provide total cargo management to Jetstar Asia, a wholly-owned subsidiary of Qantas Airlines, which flies to 22 destinations across the globe.
“Economically, this is very good for us,” said Thominet, noting that the company is also eyeing further expansions in some emerging markets in Southeast Asia like Myanmar and Cambodia.
And their quest for more acquisitions will go beyond the traditional routes with Iran even considered to be served.
“This is something that we’re considering,” said Thominet when asked about the prospect of doing business with Iran, which opened up its economy to outside forces this year after successfully negotiating an anti-nuclear deal with the Obama administration, that among others would yield to some $100 billion in fresh capital for the country.
With just four countries in 2001, ECS has managed to increase its presence in 47 more nations with annual sales of about $1.1 billion.
And it’s on a mission to further expand its network. In November, the company’s chief executive and chairman, Bertrand Schmoll, announced ECS acquired Asian specialist AVS as it looked to expand its presence in Southeast Asia.
Headquartered in Bangkok, AVS consolidates cargo from the ASEAN region on its network of flights and interlines to the rest of Asia, Europe and the US. Its office network includes Taipei, Hong Kong, Yangon, Phnom Penh, Jakarta, Kuala Lumpur, Penang, Manila, Cebu and India.
Schmoll said having a large network, but with good local market knowledge would be key to the company’s future expansion.
“For me there are two things that are important for a GSSA,” said Schmoll. “The first is the network because when you want to make an offer to an airline you must have this network and you must also control this network. That’s why it’s important you have your own representation & not just commercial agreements.”
“The second point is that the GSSA business will remain local because if locally you have poor management and poor governance you will have problems with the airline. So what is important is the selection of the manager and to have the best manager in each country.”
Schmoll added that he expected the outsourcing of cargo sales to grow over the coming years because of the amount of belly capacity that is coming on-stream.
This will lead to lower prices and therefore airlines will look to outsource the cargo sales business to reduce costs and also try to fill the cargo holds.
Thominet noted the AVS acquisition would benefit its existing customers as it would now be able to feed in cargo from across the Southeast Asia region.
This is also helped by one of its big contract wins in 2016 – a deal to provide Singapore-headquartered low cost carrier Jetstar Asia with a total cargo management solution.
Jetstar Asia currently has 18 A320 aircraft in its fleet, operating more than 600 weekly return flights across 25 destinations in 13 countries.
“With the AVS acquisition we suddenly have access to the Southeast Asia market, which is one of the booming areas of Asia,” Thominet said.
“Through the acquisition we immediately have offices, we have a trucking system to connect with the main gateways like Saigon and Bangkok and then we have Jetstar Asia feeding from those places to Singapore. Immediately − we are the GSA of Finnair flying out Singapore − we give [Finnair] access to those markets instead of just fighting over the Singapore-Europe market,” he added.
Ready for the challenges
Apart from being extremely competitive, the air cargo industry is also marred with unpredictability depending on which region you’re looking at.
But Thominet says ECS is ready for any eventualities and will push ahead with its expansion goals.
The company, after all, has successfully shown its capabilities, even in developing new IT systems to enhance efficiency.
“We need to continue this trend,” said Thominet. “We still have lots of acquisitions to make. The market is still very unsettling. It’s very difficult to predict the market. Nevertheless, we will try to do new business and develop new concepts that will help our clients.”