No big party, no ballyhoo, just a simple announcement instead: freight carrier AeroLogic celebrates its fifth birthday. The subsidiary of DHL Express and Lufthansa Cargo (50/50%) functions like clockwork, without producing much public news.
The header in the carrier’s press release reflects its program. It reads: “Birthday of an unusual airline.” Freight airline AeroLogic is unusual in many ways: Unlike other cargo carriers, and this is a striking difference, the company hasn’t got any sales department. It’s not needed because all goods loaded on board of the eight Boeing 777Fs are provided by DHL Express and Lufthansa Cargo. Basically, AeroLogic’s responsibility starts when the pallets or containers leave the warehouse at the airside and it ends when the cargo is delivered to the warehouse at the destination. A pure air operations platform.
Thanks to this rather unique biz model the administrative burden has been reduced substantially enabling a lower cost base compared with other cargo carriers. Although officially not confirmed, AeroLogic’s production costs are well below average – market analysts see a significant cost production advantage – when measured against traditional main deck capacity providers.
Ingenious operational model
In a nutshell, the Leipzig-headquartered airline is an extremely lean and highly efficient production platform for its two parent companies, employing 280 staff with most of them belonging to the cockpit personnel.
The basic operational model is both simple and quite ingenious: DHL Express largely needs capacity from Mondays to Fridays, while LH Cargo’s main business happens at the weekends. Mutually utilizing transport capacity for creating synergies was the principal idea of both companies more than five years ago to set up a joint cargo airline. Once only a bold vision has meanwhile become quite a success story.
Since its initial flight on 29 June 2009 from Leipzig to Singapore via DHL’s Middle East hub Bahrain the carrier has experienced strong growth followed by a very stable operation.
The fleet of brand new Boeing 777Fs increased in less than two years to
eight freighters. “We now operate one of the largest Boeing 777 freighter fleets worldwide,” states Managing Director Ulf Weber. “Building this up from scratch with our team has been a strong achievement.”
Journey to new horizons
From its very start until today, AeroLogic has safely and reliably operated 25,300 flights for its two parent companies. Currently, scheduled flights to 21 destinations in 15 countries are permanently operated. “When compared internationally, AeroLogic is synonymous with outstanding punctuality and maximum efficiency,” states Marcus Niedermeyer, Director of Administration at AeroLogic. “We want to continue on this successful course into the future together with our shareholders and our 280 staff.” Says Managing Director Ulf Weber: “With further growth we could reap beneficial economies of scale which would enable us, and hence our two parent companies, to benefit from even lower unit costs.”
Further growth could be stimulated by transpacific flights between Hong Kong and Cincinnati, which are slated to commence sometime in the second half of 2015 after Germany and Hong Kong have agreed on new traffic rights for cargo airlines both across the Pacific and Atlantic to the benefit of AeroLogic and Cathay Pacific Cargo. “Linking Hong Kong with Cincinnati in Ohio would be a very positive challenge for us and provide further stimuli for our entire team,” Herr Weber told CargoForwarder Global. He pointed out that the Triple Seven freighter is the ideal equipment laid out by producer Boeing for covering such long-distant routes. In case of the Cincinnati flights a further positive element would come into play – the bettering of crew efficiency. Currently, AeroLogic’s 777Fs are only operated at the weekends on behalf of LH Cargo on routes between Europe and the U.S., but if transpacific flights would be added to the global network much smoother crew rotation would be enabled, making the operations more efficient.
Lately, AeroLogic has widened their services conducted on behalf of Lufthansa Cargo, including flights to three additional destinations, among them JFK and Dacca. This July we will also start serving Chennai (MAA) with a once weekly flight on behalf of Lufthansa Cargo.
Asked about the future perspective of his carrier the manager’s answer to this question is very positive: “The joint venture is proving its functional capability and reliability day by day. So it seems that we are currently only at the beginning of a promising journey to the benefit of our customers and shareholders.”