Gulf Airlines still feel pressure on freight yields
November 26, 2009
The Middle East has bucked the global decline in airfreight traffic, but regional airlines are still feeling pressure on the freight yields, reports say.
The sector is slowly beginning to recover but the push to lower prices for transporting cargo remain across the Gulf.
Article Source: Emirates Business
‘Airfreight charges are always market driven and pressure on yield during the global recession has been plainly evident,’ Des Vertannes, Executive Vice-President, Etihad Airways Crystal Cargo, told Emirates Business. ‘It is therefore important we, and the industry at large, continue to focus on stripping out costs and deliver greater efficiency. One example would be the speedier adoption of e-freight,’ he added.
Air cargo in the Gulf Cooperation Council is most sensitive to an airline’s network, cargo capacity and hub efficiency, he said.
‘Commercial pressure from global supply chains to reduce transportation costs [specifically in the past 18 months] emphasizes the need to possess a strong well-financed and expanding airline supported by an efficient airport infrastructure and facilities.’
Generally, commodities of high value, short life or that which requires special handling tend to command slightly higher tariffs over conventional consumable products such as textiles, said Vertannes.
According to industry analysts, the freight yield is the margin an airline gets from per unit of load, per day.
Asked how the rising oil price is impacting air cargo operations in the region, Vertannes said: ‘Increase in oil prices invariably translates to higher air freight transportation costs, so it is imperative that other operating costs are reviewed, reduced and strictly managed to prevent air cargo from becoming even less competitive to other modes of transport.’
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