Air France-KLM-Martinair Cargo can now approach the market as an integrated carrier thanks to the overhaul of its old legacy systems. On the other hand, some ‘heirlooms’ of the past like Martinair and SkyTeam Cargo have not yet lost their value, says Executive Vice-President Marcel de Nooijer, thereby contradicting different media reports.
According to Mr de Nooijer, AF-KLM Cargo has already gone a long way on the road to recovery. The contribution of the cargo business to the overall result was positively re-evaluated, he told
CargoForwarder Global during a press event held in Paris last week.
“In the old ‘transfer model’ system we as cargo department had to pay Corporate always the same amount for our operations, whether the destinations were favourable for cargo or not. We were the only air cargo company to use this model. Due to this, our figures tended to be ‘under the water’ most of the time,” he stated. “In the present system our contribution is made up of the turnover minus the fixed cost. Today both passengers and cargo contribute on an equal base to the overall result.”
A remnant of the past, so it seems, is Martinair, but this daughter company too has its role to play, says Mr de Nooijer. “It is our own operating freight carrier, with its own AOC and functioning as a separate company. It still has four B747’s, three of which bear the KLM livery and the fourth one flies in traditional Martinair colours. According to him, it is a viable operation to support the Franco-Dutch freight unit’s flower business from Kenya and Latin-America.
No role in slot problems at AMS
Thanks to Martinair’s freighter fleet, KLM still ranks among the all-cargo carriers serving Amsterdam Airport. In the past, persistent rumours would have it that KLM’s erstwhile dominant position on the AMS cargo market was partly to blame for other cargo carriers being driven out of the airport.
Some years ago, fingers were pointed at KLM as well when the Dutch aviation authorities refused to grant traffic rights to a Lufthansa Cargo (LCAG) flight carrying flowers from Latin-America to AMS through Puerto Rico (U.S. territory). There, it was given a new flight number, as compliant with the Transatlantic Aviation Agreement signed by the U.S. and EU.
“This had nothing to do with us,” Mr de Nooijer claims, reacting to questions brought up by CargoForwarder Global. “That was an issue between LCAG and the Dutch authorities. We have ourselves reduced our number of freighters from 11 to 4, as they led to a loss of 72 million euros. In this respect Martinair is a different story as it is able to choose its own markets and serve them under their own AOC.” However, in 2013 when LH Cargo was refused the Puerto Rico to Amsterdam flower flight by a Dutch court, a decision that had been preceded by a lot of KLM pressure, AF-KL’s freighter fleet was still larger.
The main cause for Amsterdam’s recent slot problems is the strong growth of the leisure carriers, Mr de Nooijer holds. “It is a sad thing that prevents other operators to touch down, especially if their contribution to the Dutch economy is huge. On the other hand, there is also the question of the historic rights,” he added.
China Southern quits SkyTeam
AF-KLM Cargo is still a member of the SkyTeam Cargo alliance. This club is in no way a thing of the past, Mr de Nooijer exclaims: “Because we look into the ‘one roof concept’ whenever possible, which enables us to make use of each other’s network in an easier way.”
A courageous statement against the background that China Southern Airlines, one of the closest partners of AF-KLM, will exit SkyTeam on 1 January 2019 to strengthen its ties with American Airlines, a member of the competing oneworld alliance.
Despite this blow for Sky, Mr de Nooijer believes that the power of alliances will even grow. In the old days alliances were merely organised around the passenger network, enabling them to file their fares through Global Distribution Systems (GDS). It did not work very well for cargo due to a lack of standardisation, preventing a clear look into each other’s system, the manager stated.
“Now we are the first airline to introduce API from our own system. This technology will evolve further. I foresee a future for GDS in the cargo alliances just like in the passenger business.”
API being rolled out
It was the presentation of this API (Application Programme Interface) in Paris last week that offered the occasion for the conversation with Mr de Nooijer. In itself API is not a brand-new technology. Basically, it specifies how software components should interact. It is a set of routines, tools and protocols for building software applications.
AF-KLM is rolling out this major overhaul of its legacy systems until 2021. “All the time the shop is kept open”, said Mr de Nooijer. He had to admit that in the early days of the AF-KLM alliance a lot of behind-the scenes magic had to be performed to keep up the appearance of one seamless operation. “We are sitting on a mountain of data”, said Mr de Nooijer. “This API enables better fine-tuning to the needs of the customers.”
Mr de Nooijer’s ‘co-pilot’ Vice-President Christophe Boucher said the underlying principle of the new system is the fact that shippers and business customers hold a higher standard for the air freight industry than before.
Customers must sign into AF-KLM’s ‘myCargo’ system which on the company’s side is mirrored by ‘ourCargo’. To date the different functionalities of the system take the customer from quoting and booking through track & trace to special care and tailor-made ‘bargains’.
According to Mr de Nooijer the investment is already bearing fruit.