AA Cargo Boosts Pharma Business

“CEIV is a mechanism to demonstrate a commitment to shippers and forwarders,” says Roger. “Actually not all these carriers going for the certification have made investments in this business. It is about providing consistent processes in a traffic that is amongst the most valuable and sensitive. We want to achieve the closest involvement with the shippers. They want to have their products moving and not just being picked up at the airport. I think this is one of our most challenging investments.”
The first gateways to be assessed are Dallas-Fort Worth, Miami International and AA Cargo’s pharma facility at Philadelphia Airport. The pharmaceuticals are part of the company’s Expedite TC product.

Trying to beat AF-KLM
Roger admits that AA Cargo is a belly operator. “This gives us every couple of ways to make money in one direction.” The bulk of the business is going through gateways, which called for a massive broadening of the trucking infrastructure over the last couple of years. The systems connects more modest AA Cargo stations or airports that are no longer an AA Cargo station such as Brussels Airport, to gateways in London Heathrow, Frankfurt, Paris CDG and Amsterdam.
Of these, Amsterdam is the most important station for cargo, according to Roger. “We had too much capacity at LHR. What we found is that we had to broaden our distribution. We are now trucking flowers from AMS to LHR. We are the largest mover of flowers from AMS the US. We also move some of that business to Paris CDG. Our transit time is identical to AF/KLM’s, but we have more capacity. That is important, as perishables allow only a certain amount of time.”

First BU to integrate
AA Cargo can boast an expansive network in the U.S., adds Kathleen Lesage, Regional Sales Manager France/Belgium/Spain. “We have an expansive network in the U.S.. We serve 7 U.S. markets from Europe. Customers want direct services. We can serve most markets.”
Roger reminds of the fact that the cargo departments were the first business units of American Airlines and US Airways to integrate after the merger in 2013. “It brought huge benefits. AA had been traditionally strong in Latin America and Asia-Pacific. US Airways was concentrating on Europe. We only had to combine the operations in Germany and Italy.”

Cargo plays its own role
The merged company, which had a substantial number of narrow bodies in its fleet has put out a substantial order for widebodies. Roger: “To help both the European and the Asia-Pacific traffic. We have launched a more rapid expansion of the Asian network.”
Even within a passenger-oriented carrier, the cargo department is allowed a role of its own, Roger concludes. “Whenever we evaluate a new route, cargo is part of the business plan. So our influence can be much larger than one might expect.” Roger estimates the contribution of the cargo business to the overall revenue at 2%. “Internationally, that share is much higher and on specific routes it can be up to 30%,” he says. “For this year we expect significant double-digit growth on top of last year’s double-digit growth.”

Marcel Schoeters in Brussels