Crystal gazing

How the head of Etihad's freight arm hopes to grow the carrier in line with Abu Dhabi's ambitious 30-year plan.

As the newer relation to more established neighbours in the GCC, Abu Dhabi's Etihad Airways has, to the casual observer, to a large extent suffered from comparisons to airline giants such as Dubai's Emirates and Qatar Airways. But are such comparisons fair?

"Well, we have grown at a quite unparalleled level," explains Des Vertannes, executive vice president of Etihad Crystal Cargo, the airline's freight arm. "If you chart what Emirates and Qatar Airways achieved in their first 10 years, they had very similar growth patterns. If you look at what Etihad has achieved during the same period of time, we are on a completely different tangent."

While a major marker was put down by a bumper aircraft order at the Farnborough Air Show this summer with contracts that exceeded the record-breaking deals that had been registered by Emirates last year, Etihad was still seen by some as following in its predecessors' footsteps.

Not so, according to the airline's senior executives, who have quietly and confidently been drawing up a growth plan that is designed to provide Abu Dhabi with the logistical support to match the emirate's multi-billion-dollar 2030 plan. "Not many cities have a plan that focuses that far ahead," smiles Vertannes.

Crystal Cargo's head has had some 38 years of experience in the cargo sector, with British Airways, Air Canada, Menzies Aviation and finally Gulf Air. After 18 months in his current role, Vertannes is in a position to take stock of what has been achieved so far.

My mandate was to help grow the cargo business - there was an open book, a brown field site, and an opportunity to build an airline from scratch in a way that hadn't been done before. So that was the most interesting element of my job; my previous positions were at well-established operators, so the work of a managing director would fundamentally be reshaping what had gone before."

He is also keen to stress that despite the airline being well-capitalised, the commitment will remain on ensuring that any investment would see a positive return. "We don't have any other interests other than running the airline - it's not as if we are flushed with subsidiary companies and incomes," he adds.

As Vertannes points out, it was crucial to ensure that the airline would be built on solid foundations. "If you a develop a business at speed, your foundations may not be strong, but if you have a sound base, then you are in a position to keep building," he adds. "The most important thing is that people recognise that this is a carrier that will deliver what it says, and says what it does, as opposed to over-promising and under-elivering. Etihad has done an incredibly good job of promoting its brand."

Of course, constructing an airline giant that has to serve one of the fastest growing cities in the world has both its benefits and its challenges. In terms of infrastructure, there was an obvious concern that what was already in place in Abu Dhabi would not be able to sustain the undoubted growth of Etihad, so the first consideration was to look at what the airline did and did not control.

Despite not having the ideal infrastructure to begin with, Vertannes is keen to highlight that the relationship between Etihad and the customer has always been exceptional, a reason that he believes has contributed the number of awards the airline has recently collected.

"The plus points were definitely brand new aircraft, with all the latest technologies," the cargo executive continues. "For me, this was an absolute godsend, given that I had come to a carrier that was only three and a half years old.

I already had a freighter fleet that I could use as a base and a means of getting across the fact that we were a serious cargo player. If you go to a conventional start-up, freighters are normally the last thing on the board's mind.

Another positive was the fact that as a start-up, the various departments could be set up to work in the way that senior executives wished, thus avoiding any unnecessary restructuring.

When discussing the decision-making that goes into designing the geographical spread of the freighter network, Vertannes is clearly in his element.

Of course, freight operations at all non-all-cargo operators will inevitably be driven by bellyhold capacity in the passenger network, but the most important issue is to position the aircraft where it optimises contribution given that you bear all the costs. Given the UAE's fortuitous strategic positioning on the world map, Etihad has been able to operate freighter routes to the Chinese emerging market.

What hasn't changed over the last decade is the imbalance in world air cargo movements - what I call the factories of the East providing to the consumers of the West," says Vertannes. "So in terms of our Shanghai route, we have opted to run that through India, thus taking advantage of the important intra-India-China trade route, particularly as the middle class in both those regions starts to increase."

In terms of selection criteria generally, Crystal Cargo tends to look towards the emerging markets to see what is available, especially in conjunction with pre-existing interline arrangements. Under those circumstances, if an interline partner can commit to supporting a freighter route, this prevents the Abu Dhabi carrier from having to operate the route in isolation, and the resulting economics can provide strong cost savings.

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