Etihad Cargo Rides High on E-commerce and Electronics Demand, Eyes Continued Growth in 2024

Published: Tuesday, January 9, 2024

Etihad Cargo had a strong peak season thanks to rising e-commerce and electronics demand and the airline is hoping its new relationships covering the sector will help boost performance this year.

Leonard Rodrigues, acting manager director, head of revenue management & network planning, told Air Cargo News that much of the rise in demand from e-commerce and electronics companies was driven by increased volumes of new smartphone models.

The airline was able to meet this demand with dedicated freighter charters.

“Etihad Cargo reserves freighter availability for these projects so that we have the capability to fully meet demand,” he said.

“This combined with our express and e-commerce capabilities, our efficiency in handling this type of cargo and Abu Dhabi’s strategic geographical location makes Abu Dhabi International Airport an ideal hub location for the transit of these charters.”

Rodrigues also pointed to Etihad’s recentreciprocal blockspace agreementwith Chinese express carrier SF Airlines as an example of how it had partnered with firms to meet demand for e-commerce.

The partnership saw Etihad add flights to SF Airlines’ Ezhou hub and therefore improve connectivity with China’s five national-level city clusters and 25 domestic destinations via the airport’s transportation infrastructure, including railway, waterway, expressway and air links.

Looking ahead, Rodrigues said he expects the trends registered towards the end of last year to continue.

“We have already signed e-commerce contracts with our key partners and customers that will see us extend our dedicated charters until December 2024.

“When it comes to more traditional verticals, inventory to the sales ratio suggests that we are on the verge of an upswing, which will reinforce the current situation.

“One unknown factor is passenger demand in and out of North Asia Pacific. Demand is still quite soft at the moment, which reinforces the current shortage of belly capacity supply.

“If there is a significant rebound, additional belly capacity might ease the shortage of supply and tension in the supply chain.”

The carrier has also invested in its digital infrastructure over recent years, most recently launching an Instant Offer Rate (IOR) tool to streamline the shipment booking process.

Rodrigues said that Etihad Cargo would continue to implement changes using technology and data to enhance the customer experience.

For instance, the airline has invested in AI solutions to assist ground handlers in calculating cargo dimensions more efficiently.

“We have also co-developed and launched Sales Cockpit, a first-of-its-kind sales optimisation tool to help us add value to our customer relationships,” he said.

“In terms of partnerships, we have increased our frequencies to Ezhou in collaboration with SF Airlines and are diversifying our presence in China.”

This year, the carrier will also see capacity increase by around 10%, mostly on the back of an increase in passenger fleet with the introduction of seven Boeing 787s.

“In terms of freighters, we have firmed up our order with Airbus for seven new-generation A350F aircraft, which will upgrade our freight capacity by deploying the most efficient cargo aircraft available on the market.

“Delivery of the first A350F freighter is expected at the end of 2026 or the beginning of 2027. In the meantime, we are always reviewing tactical options to supplement our fleet.”