Are Logistics Giants Moving into the Airline Business?

Leading Global Logistics and Transportation Solutions Providers are always on the outlook    for new ways of expanding and enhancing their business models.

Buying into and the takeover of competitors as well as companies who are basically seen as essential niche-products for logistics providers, has been going on for many years now.

Agility Logistics is interested in buying into Kuwait Airways  / source: KU
Agility Logistics is interested in buying into Kuwait Airways / source: KU

So why not have your own airline?
There are of course the “oldies” out there such as FedEx, UPS, TNT and DHL who are officially listed as Integrators having long ago set up their own airline operations which are generally based around the express parcel service.
However, these companies have also, to the detriment of normal line carriers, been dabbling in the transport of so called “hard cargo shipments.”

Agility Logistcs the Kuwait based logistics company has shown an interest in buying a 35% share of Kuwait Airways.
A strange move, if it came about, many would say.
Kuwait Airways is not seen as a real international player in the air freight market as of yet.
The fleet is made up of 19 aircraft which are mainly Airbus A300, A310, A320 and A340 passenger types along with two Boeing 777s and a single B747-200 passenger craft.


So what’s then the interest for Agility?
Agility’s CEO, Tarek Sultan, in an interview with Reuters news agency last week is quoted as saying that “the move to acquire the 35% stake available to local investors was based on the company’s strategy of expanding into aviation services.”
So! not just air cargo handling and transport, but possibly passenger services in the future.
Adding one company or another to your portfolio is not really rocket science.
However, being able to have the knowledge and control over your investment is something else.
Who really knows what Agility have up their sleeves if they are successful in gaining a 35% share in Kuwait Airways!
Could it also be the start of a set-up of another Arabian air cargo airline?
We hear that they are not the only bidder.
Jazeera Airways, also based in Kuwait have shown interest as well.

There are, as far as we can tell, no plans for KU to invest in its own freighter fleet.

Cargo handling facilities in Kuwait, where money is no real object, are modern, up-to-date and the area has plenty of room for expansion.

First Priority Cargo (FPC) charter Etihad A330-200F
FPC which is an UAE based logistics company specializing in Land, Sea and Air transport has chartered an Etihad Airways A330-200F for twice weekly operations from Sharjah to Eldoret airport in Kenya’s Rift Valley Province.
Eldoret is situated in the far western part of Kenya, not far from the Ugandan border.
The charters bring in a variety of goods for local and industrial use and leave again full with fresh produce for the Arabian market.
FPC maintain that the fast and efficient road feeder services (RFS) to and from Eldoret make it cheaper and more efficient than positioning through Nairobi, Kenya’s capital city airport.
Will FPC see the need for their own fleet in the future?
Definitely too early to tell, but maybe possible.
It’s a fact that the air cargo charter business has picked up tremendously during the past six months.
Good for carriers who have enough capacity to share with logistics companies at the present time.

John Mc Donagh

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