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Tue 6 Dec 2011 01:44 PM

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GCC aviation is soaring – but what about airfreight?

The lightning growth of commercial aviation hasn’t rubbed off on the airfreight industry

GCC aviation is soaring – but what about airfreight?
Airfreight is a poor relation of the aviation business, says Fathi Buhazza

It’s staggering to look at the changes made by passenger airlines in the past 20 years. From in-flight innovations and paperless tickets to the continued rise of low-cost carriers, flying has never been more efficient, more accessible, or more enjoyable than it is now. In comparison, take a look at the past 40 years in air cargo. Then, an air waybill was printed on a typewriter and sent out. Now, an air waybill is printed from a computer and sent out.

In effect, very little has changed; the operational processes, the systems, the contracts are all much the same - as is the delivery. Unlike the passenger business, in which companies such as flydubai aim to open the market and bring aviation to a wider audience, air cargo is still too expensive, too elite and too inefficient to increase its market share - still it has just a tiny two percent of the overall freight transport market. And I am certain that needn’t be the case.

In recent times, the lack of progress has been shameful and one of the first steps must be to recognise that there is much room for improvement, from the aircraft themselves, to the packaging, loading, booking – the list is endless. Yet everyone seems to be satisfied, and no one sees a need – or space – for improvement. But contentment is the enemy of innovation. Look at low cost airline leaders such as Tony Fernandes at Air Asia, Michael O’Leary at Ryanair, or Adel Ali at Air Arabia. For them, there’s no such thing as “impossible”. They are creative, open to ideas, and surround themselves with original thinkers - and they are very successful. Mistakes are viewed as opportunities to learn, and the industry continues to progress and improve.

Most people in air cargo have worked in the industry for a long time. They are experienced. But sometimes, you get fresh thinking from a fresh pair of eyes. It might just be the case that sometimes, the voice of inexperience is worth listening to. Someone who has learned from other industries, and can clearly see the inadequacies of this one. Someone who, when faced with the statement: ‘But it’s always been done like this’, asks why. Part of the success of new entrants, be it Emirates, or flydubai, is their open-mindedness, their lack of legacy thinking, a clean sheet of paper unadulterated by the problems of the past.

One example I have recently noticed at Maximus is ACMI, the leasing of aircraft. Traditionally, contracts last for five years. That’s the way it is. But I have to question it. Why should the customer take on the long-term cost burden of an aircraft that might need to be parked in times of low demand? Why not instead make it a partnership – the customer doesn’t pay unless the aircraft is flown and makes money. Why not make every contract a win-win?

Airfreight, as always, is just the poor relation of the aviation business. Yet it costs customers a lot of money. I certainly don’t have all the answers as to how to make the industry cheaper, more efficient and more accessible. But it’s important that the industry acts, that it puts in place a system so people can brainstorm, creates a forum that encourages people to think.

Airlines could talk to the aircraft manufacturers, suggesting ways of eliminating waste, or adding something new. There are opportunities for talking across the supply chain about improving the processes of air cargo – look at the efficiencies of the integrators - they are light years ahead. And corporate social responsibility is one key area where air cargo’s emergency relief sector can easily take the lead, to make it an industry that contributes to the world.

As you can see, there are so many untapped opportunities in this business and not enough people considering how to exploit them. Our industry only needs to look at its closest relation, the passenger business, to really understand what opportunities are available, and embrace progress. Otherwise we will continue to be relegated to the lowest priority in aviation.

(Fathi Buhazza is CEO of Abu Dhabi-based Maximus Air. The opinions expressed are his own.)

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Mukesh Mudholkar 8 years ago

I agree with Fathi. There is a need for fresh thinking and approach to do business. I have been associated with the aviation industry for 22 years of which I spent 8 years in Aviation IT. I am now back in the core industry and nothing has changed. It is true that the statement 'It is done this way' is used frequently. There are faint traces of change that too with a few specific customers/airlines. However in general nothing much has changed. I am very open to changes and new ways of doing business, but I found that my ideas had no takers. It takes a great deal of confidence to make that change and no one ever wants to take that onus. The other common statement I see is "Well I have a few years more to retire, let the business continue the way it is". There is a need for change, bold approaches for the air freight industry to grow else it will continue to remain a poor cousin of the Passenger business