Qatar Airways Cargo is optimistic about the North American market. Same goes for the markets in Southeast Asia. But is an expansion of cargo services in the wings?
North America, with its strong economic recovery aided by the strong dollar, has become an attractive cargo market for Doha-based Qatar Airways Cargo, which is foraying into this region not only with its all-cargo freighters but also with belly-hold passenger aircraft.
In an interview with the American Journal of Transportation in Doha, the carrier’s chief officer (cargo), Ulrich Ogiermann, spoke of the “huge business potential” in North America. The cargo carrier operates freighter services to four destinations in the United States – Atlanta (3 freighters a week, including 2 interline freighters), Chicago (6 freighters a week, including 2 interline freighters), Houston (1 freighter a week) and Los Angeles (3 freighters a week). Chicago is the carrier’s biggest cargo station. The carrier also operates a freighter service to Mexico (4 freighters a week).
“While the US dollar has gained in strength, it has not affected our business. Indeed, we are quite happy with our business in the United States. We handle air-shipments of a variety of products such as fashionwear, machinery and parts, consumer goods, etc.” Ogiermann said.
The carrier’s chief officer (cargo) declined to comment on unconfirmed reports about new freighter flights being added to the U.S. routes. “We will be announcing, probably by mid-2016, our plans for cargo flights to the United States. Until then, I will not be able to say anything,” he said.
Qatar Airways Cargo launched a freighter service to Los Angeles – the fourth destination in the U.S. - on April 4 this year. Ogiermann said that the service was “working well”. The twice-weekly Los Angeles service, with a B777-F aircraft offers a capacity of 100 tonnes a flight. Qatar Airways Cargo, apparently, has been eyeing Los Angeles because of its significance not only for California, in particular, but also the West Coast, in general; California, because of its size, has all the hallmarks of the world’s 16th largest economy. Los Angeles international airport handled more than two million tonnes of air-cargo in 2014 valued at more than US$ 91.6 billion. Qatar Airways lifted over 49,000 tonnes of cargo from the U.S. market in 2014 and, as Ogiermann emphasized, the U.S. will continue for the carrier a “key growth market” which will add another million tonnes of freight before 2018.
This view was also echoed by Los Angeles World Airports Executive Director Gina Marie Lindsey who said, when the Los Angeles service was launched, that it would provide the Southern California businesses “with more choices to ship between the West Coast, the Gulf/Middle East and beyond”.
In 2014, over 100,000 tonnes of perishable products were exported by air from Los Angeles. With around 40,000 tonnes destined for the Middle East and Europe, Ogiermann said that Qatar Airways Cargo’s dedicated QR Fresh service and state-of–the-art cargo handling and storage facilities would ensure “the seamless movement of perishable goods, including fruits, vegetables and fish, which require constant temperature control during transit and on to their final destination”
Belly-hold Cargo
Besides the existing freighter service to four destinations in the U.S., Qatar Airways will also provide belly-hold cargo service in passenger aircraft to additional U.S. destinations in 2016. Los Angeles will have a passenger service from January 1, 2016, followed by Boston from March 16 and Atlanta from June 1.
Qatar Airways Cargo has been making massive investments in infrastructure. Besides the US$ 1 billion cargo terminal with an annual capacity of 1.4 million tonnes, it is constructing a new Cargo Terminal 2 which is expected to be ready for operation in 2018 and will have an additional 3 million tonne annual capacity, thus increasing the total capacity of both terminals to 4.4 million tonnes.
But the carrier is also closely eyeing Asia which with its strong growth is an attractive market.
With the projected creation of the ASEAN Economic Community (AEC) in Southeast Asia by end 2015, international cargo carriers have been eyeing this huge market where tariffs will be dismantled pushing growth in the intra-ASEAN trade at what some ASEAN experts have been touting as a “breathtaking pace”.
Qatar Airways Cargo has also being looking at the huge business potential inherent in this market of 620 million consumers. The prospect of what many believe could become the world’s fourth largest economic entity, has already led many to position themselves or strengthen their already existing position in this attractive market. Malaysia, which is currently chairing the ASEAN group and will be the venue for the AEC’s creation, is expected to play an important role in steering the community towards this goal along with the other ASEAN members.
Ogiermann was also upbeat about the region which, he said, was a “very promising market inherent with strong growth potential”. “If it remains liberal and non-protectionist, it will continue with its positive track record. Malaysia and Indonesia, in particular, are developing well. Vietnam is another important growth area where I see a lot of investments flowing in, including from its competitor China. Vietnam is currently enjoying a considerable flow of investment as it experiences a surge demand for its low-end products, particularly textiles and clothing,” Ogiermann said.
Qatar Airways Cargo does not have an all-cargo service on freighter aircraft to Kuala Lumpur but operates three belly-hold daily wide-body aircraft passenger flights to Kuala Lumpur. He pointed out that Samsung was also engaged in massive investment in the AEC region. “We have looked at the opportunities in the region Malaysia and are, generally, confident about its growth track,” Ogiermann added.
Outside the AEC region, the carrier is also optimistic about other players in the Asia continent. While North and Northeast Asia, particularly Japan, China and South Korea, were interesting regions for the carrier, India is also an important and attractive market for Qatar Airways Cargo.
“India’s pharma industry has become an important export industry. Hyderabad, in particular, seems to have built up a reputation as Asia’s pharma hub. We find the developments in India very encouraging,” he observed. The cargo carrier operates an extensive service of all-cargo flights to Ahmedabad (four freighters a week), Bengalaru (two a week), Chennai (seven a week), Delhi (four a week), Hyderabad (two a week), Kolkata (two a week) and Mumbai (six a week). The cargo carrier has added new specialty product services to its portfolio such as QR Pharma and QR Charter “which make our services increasingly appealing and relevant to our customers”, as Ogiermann put it.
The cargo carrier has advanced to become the world’s third largest cargo in 2015. The ranking is based on the IATA Carrier Tracker Report July 2015.
