The Franco-Dutch airline trio Air France-KLM-Martinair Cargo is pursuing very ambitious objectives. Their aim is to become the global market leader in the special products segment such as pharmaceuticals and express shipments. This concentration on transporting high-yield goods is aimed at paving the way for the return to profitability.
These figures justify some optimism: unit costs dropped 2.5 percent year-on-year in Q1 of 2014 while operational profitability leapt by 5.6 percent and the load factor went up from formerly 63 percent to 64.8 percent. Encouraging signs for a brighter future, interprets AFKLMP’s VP Cargo Eric Varwijk these results. At an Amsterdam-held press meeting the manager confirmed his division’s target to become profitable by 2016. This is aimed to be achieved by a broad variety of specific measures:
- Deepening the partnership with U.S. carrier Delta on transatlantic routes, with both sides enjoying antitrust immunity
- Extending the network by introducing new services to seven intercontinental destinations, among them Mumbai, Santiago de Chile, Panama City, Tokyo Haneda and Jakarta as from next July
- Further improvements of the product quality and operational reliability to boost the customer satisfaction rate, and – above all
- Concentrating on temperature sensitive pharmaceutical shipments, express items, and the carriage of mail.
“This will boost our competitiveness, improve our results and put us in the pole position among the leading European cargo carriers,” stated manager Varwijk.
The carrier’s strategic focus on pharma and express is a result of market developments. A growing number of people worldwide tend to practice e-shopping, which increases the need for express services. While e-commerce boosts international air transports by 5 percent in average, AFKLMP Cargo report a growth rate in this product segment of 7 percentage points, thus outgrowing the market. While at present, express and mail accounts for 12 percent of the carrier’s turnover “we are targeting 25 percent by 2020,” announced Stephane Bocquet, AFKLMP’s VP Express and Postal Services.
Likewise are the ambitions in the broad range of temperature controlled products, in which the Franco-Dutch carrier has concentrated all activities in a dedicated business unit, similar to express and mail. “From the very beginning we’ve set the standards for pharma air freight solutions,” stated Ramon Delima, VP Variation and Industries at the Amsterdam-held press meeting. And this is how it should stay he hopes, by offering the industry state-of-the-art services like dedicated cool storage facilities worldwide, active container handling in Schiphol and CDG or by introducing real-time monitoring of temperature critical shipments along the entire supply chain in partnership with logistics giant Kuehne + Nagel.
Ambitious aims that can only be realized if the ground infrastructure is first class. To ensure this, AFKLMP intend investing in cool facilities worldwide by spending €25m until 2018. An important precondition to meet the carrier’s target of growing its pharma biz ten percent every consecutive year, as declared by the cargo management.
This doesn’t seem to be unrealistic as the 20 percent leap in pharma sales in Q1of 2014 illustrates.