Silkway West Airlines could be a major winner of the pandemic once it is over and business is back to normal. Why? Because the carrier decided to stick to its Blocked Space Agreements, avoiding flight cancellations to/from China despite the coronavirus, thus showing solidarity with its customers.
The Baku-based airline could currently be earning much more money given that cargo rates for goods flying on legs between China and Europe have meanwhile become a gold mine for carriers. The
reason is a mismatch. On the one side, forwarders and producers have great transport demand, while carriers have either largely reduced their flights or cancelled their China services completely
until further notice.
Hence, booking shipments from or to China has become a high-risk gamble these days, due to the shortage of capacity.
A situation illustrated back in the day by the great British economist, David Ricardo, who examined the consequences of the balance between supply and demand getting out of hand.
Making a fast buck…
What the scholar predicted more than 200 years ago, is evidenced today by some airlines who take advantage of the – from their point of view – favorable situation. Especially for urgently needed
spare parts or similar shipments, the rates demanded by some carriers are extreme, CEO Stephan Haltmayer of forwarding agent Quick Cargo Service, reports. In hiking up the rates, carriers are
exploiting a coronavirus-caused bottleneck situation at the expense of freight forwarders and producers, he says.
Yet, there are also airlines that do not play the game and forego short-term financial benefits. One of these exceptions is Silkway West Airlines. It has decided to keep flying according to
schedule, offering the market a fine-tuned mix of scheduled and charter flights to/from China.
… or staying loyal to customers
All operations, Silkway West Airline’s management emphasizes, are performed in accordance with recommendations from the WHO and similar regulatory bodies, as well as its own restrictions which
include the abandonment of crew layovers in China. By keeping up its services, the Azeri carrier is “honoring the loyalty of our BSA (Blocked Space Agreement) customers throughout difficult
times,” says Wolfgang Meier, CEO and President of Silkway West Airlines. “We are a forwarders’ airline and we will further expand on those relationships by enhancing the group of close
partners,” he exclaims.
He admits, however, that despite all operational and handling efforts, it is a daily challenge to manage the imbalance of volumes transported on the different trade lanes. “But we do count on
the understanding of our partners as this is a really special situation.”
Smart move
In the end, Silkway may emerge stronger than before from the corona crisis, following its adherence to the Capacity Purchase Agreements signed with forwarders and its refusal to raise prices in
the short term. A decision that could pay off in the long run in terms of customer loyalty and in fostering trust - also with positive financial consequences.
Final remark from Mr. Meier: “We would like to thank our pilots and the entire team in being utmost cooperative in finding the right pattern to keep up the operation without major
disruptions.”
Heiner Siegmund
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