Cargolux Said to be Considering ACMI Entry
Freight carriers are always looking for new avenues to increase revenues and yields.
In this sense, Cargolux, the Luxembourg-based all-cargo airline is no exception.
Study shows hope for ACMI entry
The freight carrier had an interview lately with Lloyd’s Loading List whereby it was stated that Cargolux had completed a study into the aircraft wet lease market” - in short form - ACMI.
This entails a carrier leasing out one or more of their aircraft to other operators under the ACMI principle.
“Aircraft, Crew, Maintenance and Insurance” - ACMI. The lessor, in this case then CV, provides the aircraft with one or more complete sets of crew, all maintenance costs and the aircraft insurance which is generally including full hull and third party liability.
All other (operating) costs such as fuel, landing-handling fees, crew hotel costs etc are for the account of the lessee.
It is normal that the lessor then charges the lessee on a so-called “block-hour” basis whereby a minimum number of guaranteed monthly block hours are agreed upon. The minimum block hour payment must be effected regardless of whether the (new) operator utilizes them or not.
This form of lease has been used in the past mainly by carriers who require extra capacity on certain routes for a restricted time period.
Airlines such as the New York-based Atlas Air have sold this form of operation during the past two decades where demand for ACMI operations was quite extensive.
Will it work also for Cargolux?
The reason for Cargolux considering going down this road is simply to find a new source of revenue to supplement their present scheduled freighter operations.
It’s no secret that cargo yields have dived during the past two years, mainly due to over-capacity on the market. Today’s long-range passenger aircraft are capable of carrying up to 30 tons over greater distances in their holds.
This dilutes tonnages available for pure freighter aircraft carriers.
However, the question arises whether there is still a viable market for ACMI operations.
CV managers seem to think so and based on the outcome of the study have initiated a project for introduction of ACMI services by latest the end of this year.
The CV fleet is large enough for them to develop a flexible ACMI program for customers who may wish to utilize one or the other of their B747Fs.
They will have to table attractive conditions in order to effectively compete in this market.
John Mc Donagh