A gap doesn’t stay unfilled for long. LATAM Cargo, last week confirmed again this age-old insight by deciding to increase its flights between the EU and destinations in South America from currently 10 to 12 per week, effective 01OCT24. CargoForwarder Global reported exclusively on 04AUG24. This decision follows the partial withdrawal of Martinair Cargo and Qatar Airways Cargo from these markets.
Will LATAM Cargo succeed in what two renowned freight carriers appear not to have or only partially managed to do? Making cargo flights between the EU and South America profitable in the long term? That is the essential question. Andrés Bianchi, Head of Freight at LATAM Cargo, provided the answer in an online call with CargoForwarder Global. His caveat: the conditions have to be right.
B767F of LATAM Cargo parked at Santiago de Chile’s Aeropuerto de Pudahuel, the country’s busiest by passengers and cargo – Picture: Courtesy LATAM Cargo
It’s all about the conditions
The most important prerequisite: The shipment volume must roughly correspond to the available capacity. A B777F which can carry 100+ tons per flight, is too large, at least for routes between Europa and South America. In contrast, the much smaller B767-300F, which can carry around 50 tons per flight, fits better. The average load factor on westbound flights is very high, whereas the return flights from South America to Europe are moderately booked. However, when looking at the entire rotation, the B767F operation generates a surplus. This too, because its operation is cheaper compared to a B777F or even the B747-400 cargo jumbos used by Martinair to date, each of which can carry 120 tons per take-off. On routes to and from South America, this doesn’t match market demand and thus generates losses.
Right-sized freighter aircraft
Hence, the right fleet utilization determines if a route can be operated profitably in the longer term – or not. This factor influences the overall calculation of the air transports on routes across the South Atlantic. Against this backdrop, LATAM Cargo decided already in mid-2017 to phase out its B777Fs and rely entirely on the smaller B767-300F, which have meanwhile grown to twenty units, confirms Cargo Chief, Bianchi.
He also points to another cost advantage: his company offers the market a dense network within South America. This is an important sales argument for customers, including belly transports of shipments transferred at core hubs like Sao Paulo, Curitiba, Buenos Aires, or Santiago on commuting flights.
Interline agreements instead of route joint ventures
Asked about route joint ventures with partners based on metal neutrality, i.e. with coordinated transport rates, such as those agreed between Lufthansa Cargo and United Cargo or Cathay Cargo, he said that his company prefers interline agreements. This is backed by a figure: LATAM has signed around 80 such agreements with partner airlines, six to eight of which exist between LATAM and airlines from Japan, China, Hong Kong, and Taiwan. LATAM itself does not operate own flights across the Pacific.
1,700 tons per week
Upcoming tasks include the consolidation of the cargo network, the executive announces, combined with an even closer integration of passenger and freighter flights, i.e. belly and main deck cargo. “Our goal is to transport 1,700 tons per week in our freighter’s main decks and the holds of our passenger fleet,” he says, delivering a precise figure. However, instead of tonnage or capacity issues, the stricter customs regulations in Brazil are currently at the top of his agenda. A new system demands that customs duties are to be levied even on small consignments which were so far exempt from such taxes. This ups the government’s budget but loads a lot of bureaucracy on the shoulders of airlines, handling agents, and customs inspectors. The system is still in its infancy but will become mandatory sooner or later.
Source link : http://www.bing.com/news/apiclick.aspx?ref=FexRss&aid=&tid=66c22240f41b4b4da84c8708bab8d362&url=https%3A%2F%2Fcargoforwarder.eu%2F2024%2F08%2F18%2Flatam-cargo-on-way-to-market-leadership-in-south-america%2F&c=6929362797480556739&mkt=en-us
Author :
Publish date : 2024-08-18 04:51:00
Copyright for syndicated content belongs to the linked Source.
