There was a real buzz at the Chapman Freeborn booth at the air cargo Europe in Munich. The reasons: The air charter broker’s management team celebrated its 50th Anniversary together with business partners, employees, and companions. At the same time, new ideas and future concepts were presented to the numerous media representatives under the verbal heading “What's next?”.
What an enviable privilege: work as long as it's fun, stop when personal interest wanes. Russi Batliwala is in this most comfortable position. He has been with the company for 37 years, most of
that time as majority owner. Since 2019, when the Lithuanian Avia Solutions Group acquired Chapman Freeborn, he has been its chairman without a binding contract.
Chapman Freeborn embarked on the M&A avenue…
Although the financial details of the Avia deal never became public, Russi does not contradict the claim that it was very advantageous for him. Yet, wealth is relative and should not be measured only in pecuniary terms. Someone can also be rich if he finds his job meaningful, socially valuable, and creative. In Russi's case, the latter categories apply 100%.
Unlike in the past, he is no longer as involved in the day-to-day business. Instead, he is primarily concerned with strategic issues and ideas on how the Chapman Group can continue to grow. And his compass clearly points to Mergers and Acquisitions. “That’s our future,” he stresses.
… as reaction to external pressure
Why is the broader positioning of the company a must? Because a process began a good 10 years ago which has since gained momentum: “Airlines are starting to cooperate increasingly more closely with forwarding agents, putting a lot of pressure on our margins.” The result: Chapman Freeborn has to diversify, look for additional business areas, develop new products and massively invest. The visible outcome is the OBC business, which is growing very strongly and is climate-neutral thanks to CO2 compensation measures. The takeover of animal transport specialist, Intradco Global, also reflects the M&A strategy. “They are a niche player, but real experts when it comes to handling live animal shipments and providing wooden livestock crates fitting different aircraft configurations,” Mr. Batliwala notes.
Controlled capacity is here to stay
He is convinced that freight forwarders will not abandon the policy of controlled capacity that has been pushed at least since the outbreak of the pandemic. This is evidenced by the more than one thousand charter flights conducted by Schenker last year, for example. There is also the direct entry of large logistics companies into the air freight business, taking over freighters and building up their own fleets, as demonstrated by Kuehne+Nagel, CMA CGM, Maersk, or MSC.
Magma takeover was a smart move
For Chapman Freeborn, the 2017 acquisition of Magma Aviation, meanwhile a member of the Avia Solutions Group which manages a fleet of almost 200 aircraft on ACMI basis (Aircraft, Crew, Maintenance, and Insurance), proved beneficial. “Magma, with its four B747-400Fs, is an in-house asset that enables us to grow very strongly,” says Mr. Batliwala. The inhouse share of the charter business is now around 20%. Yet, it is growing much faster than the business with external capacity providers, he indicates.
No interest in deck chairs
Chapman Freeborn has set itself high growth and financial targets for 2030. The manager does not specify the key points, referring to a confidentiality clause. However, the geopolitical situation is not predictable, as shown by Russia’s war on Ukraine. “You never know what's going to happen next. But it is this uncertainty and the search for new solutions in changing situations, which I love. It drives me forward every day.”
That is why Russi is still standing on Chapman Freeborn's navigation bridge instead of languishing on a deck chair in the sunshine.
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