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DHL joins Gulf Air’s cargo incentive programme

by ArabianBusiness.com staff writer  on Monday, 01 October 2007
Strategic alliance: DHL Express is strengthening its relationship with Gulf Air by becoming the first member of the airline’s Global Incentive Agreement Programme.

DHL Express has become the first member of Gulf Air's recently launched Global Incentive Agreement Programme.

As part of the strategic partnership, the international logistics company will be provided with a number of incentives to transport its airfreight through Gulf Air, helping the airline boost its annual cargo volumes.

"As the airfreight industry becomes increasingly globalised, through mergers and acquisitions, its now common for freight forwarders to form tripartite partnerships with other members of the logistics chain," said Sam Okpro, Gulf Air's acting head of cargo.

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"Since legacy airlines rely on freight forwarders for over 80% of their cargo revenues, its imperative they are placed on the global forwarder's core carrier list. Gulf Air's Global Incentive Agreement Programme is intended to facilitate this process," he added.

Following its membership of the global incentive programme, DHL Express will be assigned a key account manager and provided with specific service level commitments from Gulf Air. It will also benefit from preferential access to the airline's network, which stretches from Europe to Asia, covering 40 cities in 26 countries around the world.

"As our preferred partner in business, DHL Express has stood by Gulf Air through thick and thin. We value our relationship with them and believe they deserve to be the programme launch customer," added Okpro.

"We appreciate their true partnership spirit during the negotiation of the agreement and look forward to extending the agreement to DHL Global Forwarding and other global partners."

DHL Express, which has already entered similar agreements with other regional and global airlines, is upbeat about its alliance with Gulf Air. The company's membership will initially last one year, although if successful, this will be extended in the future.

"Gulf Air is one of many carriers that DHL has a very close affiliation with, having established our operations in Bahrain 30 years ago," said Bachi Spiga, head of operations, DHL Express Middle East. "With Gulf Air reorganising its operational structure to a primary hub in Bahrain, we have noticed an increase in the frequency of its flights. DHL is looking to maximise usage of these flights. The partnership will also benefit our customers who will receive faster deliveries, as DHL will gain preferential access on Gulf Air routes."

With the first member of Gulf Air's Global Incentive Agreement Programme now on board, the airline has entered discussions with a number of other international freight forwarders to join the scheme. "We plan to approach all major global forwarders with a proposal, with the next target partners being DHL Global Forwarding and Aramex," said Okpro.

How does Gulf Air’s Global Incentive Agreement Programme work?

Gulf Air has targeted a number of international freight forwarders to become members of its Global Incentive Agreement Programme. Once a company finalises its membership, like DHL Express has recently done, it receives incremental incentives by route group to perform over and above last year's production. This benefits Gulf Air, because higher incentives are provided on directionally weak sectors, allowing the airline to prosper from increased cargo volumes, while the global partner benefits through higher levels of commission.

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