On 31MAY22 the freight division of Swiss Air Lines announced its entry into the existing business agreement inked in 2016 by Cathay Pacific Cargo and Lufthansa Cargo. It allows for joint pricing offers, sales initiatives, and the mutual handling of shipments on all routes between Hong Kong and Europe.
The deal has been consented by competition authorities. It is a prerequisite for the tripartite alliance now announced, above all enabling joint pricing, i.e., ruling out possible sanctions for collusion. It is an industry first, and might become a role model for similar pacts to follow. These could be ties between Swiss WorldCargo and United Cargo or ANA Cargo, Lufthansa Cargo’s other market joint venture partners. Rivals such as AF-KLM Cargo - Delta Cargo, or IAG Cargo – AA Cargo, could follow suit by integrating subsidiaries into existing route alliances if consented by competition watchdogs.
Existing ties are deepened
In their joint release, the trio announces that Cathay Pacific and Lufthansa Cargo already have a close collaboration on international trade lanes via their hubs in Hong Kong and Germany, while the handling of cargo in Hong Kong is coordinated under one roof at the Cathay Pacific Cargo Terminal of Hong Kong International Airport. This connection is now extended by partner Swiss WorldCargo.
Under the expanded joint business agreement, the three cargo carriers will work closely together on network planning, as well as on sales, IT, and ground handling. Initially, the airlines will cooperate on traffic from Hong Kong to Zurich and Frankfurt, with traffic to and from Hong Kong and the rest of Europe planned to be included later this year.
Customers benefit, claims the trio
Swiss’ Head of Cargo, Lorenzo Stoll lauded the deal, saying that by entering this pact “we can not only strengthen our already close collaboration, but also expand our network offering to our customers, while staying true to our high quality and flexibility.”
For several years, there have been efforts to establish closer cooperation between Lufthansa and its subsidiary, Swiss, in the cargo sector, while maintaining the legal independence and commercial autonomy of the two players. The cargo route JV now announced is a key result of this objective.
Lufthansa Cargo CEO, Dorothea von Boxberg sees advantages for the joint customers of the three airlines resulting from the pact: “We are very pleased about the trilateral cooperation just starting, bringing three well-known cargo carriers to the table, and making an even more attractive offer to our customers. Cargo customers will appreciate the opportunities for quicker and easier shipping. The expanded joint venture will generate numerous benefits for our customers because our networks, our hubs, and our fleet complement each other effectively.”
Tom Owen, Cathay Cargo helmsman, added to this: "We are delighted to welcome Swiss WorldCargo to our joint business agreement. Cathay Pacific is always looking for more ways to offer our
cargo customers greater choice and more options for their shipments whenever they fly their goods with us."
The trio emphasizes that their joint activities will be carried out in full compliance with all applicable laws, including the competition rules of the European Union and Hong Kong.
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