ABC Enters the Driver’s Seat

Up to now, AirBridge Cargo, the airfreight carrier which was founded in 2004, considered itself being in an experimental and learning stage. Meanwhile, ten years later the Moscow-headquartered airline claims to have become mature and is eyeing a seat in the first row of the air freight industry to actively bring in its know-how and managerial expertise.

Gave a review and outlook on ABC (l>r) - Robert van de Weg, Denis Ilin, Wolfgang Meier  /  source: hs
Gave a review and outlook on ABC (l>r) - Robert van de Weg, Denis Ilin, Wolfgang Meier / source: hs

Denis Ilin is a man of clear words. “Our focus has slightly changed. While we have gone through a very fruitful decade-long learning curve in the past, we now feel ready to enter the next stage by taking on the role as one of the drivers in the global air freight arena.” According to the ABC Executive President, this implicates playing an active part in international organizations such as IATA and TIACA or projects like Cargo 2000 and E-Freight.

Denis Ilin
Denis Ilin

This announcement he made at a Frankfurt-held press briefing on the occasion of the carrier’s tenth anniversary of flights to and from Rhine-Main. There, Denis Ilin together with the Volga-Dnepr Group Head of Sales Wolfgang Meier rounded up the past of the airline and delivered an outlook on projects to come. On this occasion, former Cargolux executive and meanwhile Senior VP Marketing and Sales at ABC, Robert van de Weg was introduced to the media in his new role.
When taking the micro Robert lauded the entrepreneurial spirit within ABC, particularly the carrier’s clear aim to grow and to break into the phalanx of the world’s leading cargo airlines. “Contributing to achieving this aim is just great,” Robert exclaimed.

Wolfgang Meier
Wolfgang Meier

Growing European network
Currently, ABC operates 15 freighter flights a week to Amsterdam and 14 to Frankfurt, deploying either Boeing 747-400s or the larger 747-8Fs. “At Rhine-Main we have meanwhile become the second largest carrier by tonnage, accounting for about eight percent of the market share,” stated Sales-Chief Meier. Being recently guaranteed the Fifth Freedom for carrying goods between Germany and the U.S. Meier announced adding a second weekly Frankfurt to Chicago flight at the beginning of the next winter schedule.


Europe has grown into the carrier’s key market with major clients like Volkswagen, Bosch, Philips, La Roche, Lufthansa Technik or Liebherr being located there. Due to the thriving biz, new destinations like Zaragoza, Malmoe, Milan or most recently Leipzig and Munich have been added to ABC’s network.
“Looking at things rather from a cautious and conservative angle for this year we expect tentative growth,” announces Meier. He went on to say: “Q1 hasn’t been bad. Now for the rest of the year we expect higher volumes compared to 2013 and a slight upward trend in yields.”

The one billion dollar target
Denis Ilin added that 2014 could develop into a record breaking year with ABC surpassing $1bn in revenues for the first time ever. It would be quite a leap in view of last year’s turnover of $850m. 
However, much depends in 2014 on how the Ukraine conflict further develops. Should the political and military situation worsen and hard sanctions being imposed on Russia by the EU members and the U.S. Administration, the prognosis of the ABC managers could go to ashes fast. Questioned on this matter Ilin only did express his hope that the tensions will be overcome soon with everybody getting back to normal biz the sooner the better.
Here are some key figures delivered by the ABC executives at Frankfurt:

  • The carrier’s on-time performance has improved continuously, oscillating between 78 and 79 percent. “Our aim is to reach steady figures above 80 percent,” said Ilin.
  • In 2013 ABC together with its subsidiary Atran carried more than 290,000 tons on routes to/from Europe, with a growing tendency for this year.
  • ABC operates a fleet of twelve freighter aircraft averaging five years of age, comprising seven Boeing 747-400Fs or -400ERFs and five 747-8s, serving 25 online stations in twelve countries.
  • Within Russia five ABC hubs have been set up: Moscow, Yekaterinburg, Novosibirsk, Krasnoyarsk, and Khabarovsk. All stations are supported by road feeder services.
  • ABC and its parent Volga-Dnepr are ranked first among Russian carriers, both in terms of cargo carried (408,365 tons in 2013) and revenue ($2.6bn).
Robert Van de Weg
Robert Van de Weg

Concentrating on point-to-point services
Manager Meier conceded that the airline has scrapped plans it promoted very actively some years ago to conduct transpolar flights, connecting China and Siberia with Chicago or other U.S. destinations. “When setting up this strategy we have somehow underestimated the enormous importance of our central gateway Moscow Sheremetyevo through which most of our shipments transported on East-West routes are transited.”


While touching the product issue Wolfgang said that flying goods from airport to airport is ABC’s core product. Ilin confirmed: “I don’t think the market is prepared to pay more just because shipments are branded as – say – pharma, perishables or dangerous goods. All our products ar time definite but we don’t brand them as such.”


Asked about his carrier’s next steps Ilin said that ABC intends to up its Chicago and Dallas flights from currently five to daily, with Tokyo (Narita) going up from two to four per week.

ABC might cooperate with a Russian passenger airline in cargo
Asked about his carrier’s next steps Ilin said that ABC intends to up its Chicago and Dallas flights from currently five to daily, with Tokyo (Narita) going up from two to four per week.
He reacted positively when asked by CargoForwarder Global about any potential cooperation in cargo with a major Russian passenger airline.

 

Here is what Ilin stated:
“We don’t have such plans but we do see some opportunities. Aeroflot and Transaero are focusing on their core biz, transporting passengers. They both operate long-haul flights and also service quite a number of European destinations. Hence, we could make use of their space in the lower deck compartments of their fleet and mutually utilize their and our own transport capacity. Since most of their flights are operated via one of the Moscow airports we could transfer the goods from airport to airport easily for beyond transportation through our own freighter aircraft.” Having said this, the manager once again emphasized that these are just first thoughts that need to be elaborated further to possibly come to fruition one day. 

ABC was keen to liaise with Cargolux
During the press meeting ABC unveiled another topic that was embroidered with speculations – the carrier’s aim to buy into Cargolux. Ilin confirmed former intentions by the Volga-Dnepr Group to purchase 35 percent of Cargolux’s shares held by Qatar Airways until December of 2012 and taken over by Luxembourg’s Government after QR had decided to exit Cargolux as result of a deep rift with part of the management and supervisory board on strategic questions. However, the Grand Duchy’s Government decided against the ABC offer and in favor of selling the package to the public Chinese investor HNCA that outbid ABC financially. According to Wolfgang a regretful decision: “politicians are not driving volumes,” emphasized the manager.


When deciding which bidder qualified best to partner with Cargolux Luxembourg Government’s main interest was obviously to get as much money as possible from an investor. Instead, they should have decided in favor of an applicant that would have paid less, but was able to bring in synergies which in the long run Cargolux would greatly have benefitted from, said a voice close to the case.

 

Meanwhile, ABC operates six flights a week ex Zhengzhou, linking Cargolux’s upcoming Chinese hub with Europe, Russia and the U.S. These services offer forwarding agents a wealth of options,” notes Robert van de Weg. At the latest by the end of October the Zhengzhou flights will be upped from 6 per week to daily, announces the manager.  

 

Heiner Siegmund   

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