The Skies are Wide Open for Cathay and AeroLogic
Beginning in fall of 2015 cargo carrier AeroLogic is allowed to commence scheduled flights across the Pacific. Conversely, Cathay Pacific Cargo will be able to offer direct transatlantic transport from German airports to different destinations in the U.S.
The skies have become somewhat more open, at least for flights operated by Hong Kong’s Cathay Pacific Cargo and German carrier AeroLogic, a joint venture of DHL Express and Lufthansa Cargo (50/50%). Both carriers were conceded Fifth Freedom rights, giving them the basic right to stretch their worldwide reach, in spite of many persisting restrictions and fences which still fragment the skies.
The agreement on liberalizing certain sectors is the result of a two day bilateral negotiation on air traffic matters between officials from Germany and their counterparts from Hong Kong, held recently on request of the German side in Hong Kong.
Their main aim was to obtain additional rights for AeroLogic, to directly link DHL’s main East Asian and North American hubs Hong Kong and Cincinnati in order to keep up with the logistics giant’s increasing transport demand across the Pacific. Up to now this was impossible for the Leipzig-based cargo airline due to lacking bilateral agreements. Consequently, DHL Express had no choice but to utilize external capacity for connecting both gateways, so far mostly provided by U.S. carrier Southern Air. In future however, with the political barriers having been set aside, DHL’s subsidiary AeroLogic can conduct daily flights under its own operational responsibility between HKG and CVG. According to statistics their Triple Seven freighters are able to serve this route nonstop, although with a slightly reduced payload due to the vast distance separating the airports. An interesting question to be answered in the coming months will be if AeroLogic decides to operate the HKG-CVG link with its own equipment consisting currently of eight 777Fs or if the airline ops for a route swap with another capacity provider.
So what’s Cathay Cargo got in return?
From the Hong Kong-headquartered carrier’s point of view the result of the bilateral traffic agreement based on give and take is remarkable as well. CX Cargo has secured the right to offer the market daily transport of air freight from any German airport to a preferred U.S. destination, with the exception of Atlanta and Chicago that remain taboo for the time being. Although at this early stage it is still unclear which route CX will opt for, flights FRA-JFK or FRA-DFW could well stand on the shortlist of the carrier.
German negotiators clap each other on the shoulders
This is evidenced by an official statement sent by speaker Ingo Strater of Berlin’s Ministry of Transport upon request and exclusively to CargoForwarder Global. It reads: “The prime objective of the negotiations was to secure traffic rights on routes from Hong Kong to Cincinnati for cargo carrier AeroLogic GmbH.” This, because AeroLogic is a main capacity provider for transporting intercontinental shipments contracted by DHL Express, which is facing global competition exercised particularly by UPS and FedEx. Next, the written answer from Strater goes on to say: “For closing its global network AeroLogic was still lacking traffic rights between Hong Kong and the U.S.” This chapter can now be closed after the bilateral agreement between Hong Kong and Germany has been signed.
His statement concludes that: “All in all, the outcome of the traffic negotiations constitutes a satisfactory result for Germany, because in conjunction with the recent agreement reached with the Russian Federation to overfly Russian territory, the Hong Kong treaty has considerably enhanced DHL’s competitiveness in the global express market.”