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The forthcoming expansion of the cargo terminal at Abu Dhabi airport will present Etihad Crytal Cargo with a fresh wave of market opportunities, explains Des Vertannes, executive vice president of Etihad Crystal Cargo.

What new destinations does Etihad Crystal Cargo have planned for 2008?

The only route we currently have planned is Abu Dhabi to Beijing, which will commence at the end of the first quarter of 2008. It will be served four times a week with a passenger aircraft.

At present, we have pure cargo routes to Shenzhen in the South and Shanghai in the East operated with our new MD-11. The addition of Beijing in the North, therefore means Etihad is serving the ‘golden triangle' in China.

In 2008, we expect to see China grow from its present 6.5% of our business to between 10 to 15%. Since the arrival of our MD-11, we are constantly evaluating opportunities in other niche markets and we are currently considering Africa or increasing our frequency to China.

What market opportunities are made available from Etihad Crystal Cargo's fleet capabilities?

With our A300s we are able to examine markets closer to the Middle East such as North and Northeast Africa. We currently serve two destinations there and are looking into increasing frequencies or range.

At present, Etihad's primary focus is on hard freight, but to a certain degree we also handle perishable items. In 2008, we will be looking at developing into other products, namely mail, express and cool chain.

They are all sensitive cargo that require establishing credibility before you can target the right marketplace. Part of the process means it must dovetail seamlessly with our own network and authorities such as customs and police.

How will Etihad Crystal Cargo set about establishing itself in these markets?

In the example of cool chain options, the products emerge from established markets such as Australia, which revolve around the sensitivity of the meat export. We naturally want to exploit these types of businesses.

If we had sensitive cargo flying in from all over our network it would be too much, but if we can ensure we satisfy a specific trade lane and a specific customer request without imposing significant pressure on our hub then we can progress forward.

What plans are in place to deal with the uncertain future of the airfreight market?

There is no question that the air cargo market faces a turbulent 12 months precipitated by increasing fuel costs and the economic issues emerging from the US and the UK, which is likely to spread to other areas as well.

On a number of our routes, the depreciation of the dollar has increased our operating costs, due to the dirham being pegged to dollar. This means we have to constantly revaluate our positions in markets where costs are at a risk of rising.

What methods can be used to minimise rising operational costs?

The biggest challenge for any airline and its cargo division is how does it reduce its cost base without charging the supplier more. We have to look at technology and how we can fast track e-commerce and ensure all areas of the air cargo supply chain participate in the solution.

How will the completed expansion of the cargo terminal at Abu Dhabi International Airport add impetus to Etihad's business?

The cargo terminal expansion was originally due for completion in June but has now been pushed back to August, which is a concern.

The airport's capability is a big step forward for Etihad and we want to ensure that the momentum is not lost. Once finished, it will give us an additional 100,000 tonnes of capacity, which is a huge increase. Considering Etihad constitutes 80% of the airport's activities, it is set to benefit considerably.

Does Etihad believe the expansion at Abu Dhabi airport will enable the emirate to match Dubai as a transport hub?

I think that will take some time. It is not our plan to try and compete with Dubai, I think we should try and ensure the GCC becomes a single market and that freight flown into Abu Dhabi can be freely circulated not just within the emirates but the region as whole.

It is therefore important that the hub of Abu Dhabi is seen as the choice of certain distributors and certain exporters, so we can prove it works as well as any hub in the region, including Dubai.

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