Since joining the Volga-Dnepr Group in 2013, in the position of operations director of AirBridgeCargo Airlines (ABC), Sergey Lazarev has overseen a period of rapid growth for the Russian all-cargo carrier. Two years later after joining the carrier, he was appointed general director of ABC, which had been aggressively pursuing long-haul cargo routes and achieving double-digit growth for several years, often at the expense of its rival legacy carriers in Europe. In fact, over the last five years, ABC has enjoyed a 17 percent annual compound growth rate, in terms of tonnage.
It’s been a wild ride under Lazarev’s watch, as he freely admitted. “I tend to think that this complex puzzle called the airline industry is what pushed me forward during all these years,” he said. “Understanding that every decision taken today might change the future doesn’t simply come with huge responsibility, but more with the adrenaline that entails new challenges.”
We stopped to chat with Lazarev in April to discuss some ramifications of ABC’s rapid growth, as well as any concerns he might have regarding congestion at European airports or possible alteration to ABC’s freighter fleet.
Q: What are some key initiatives that enabled AirBridgeCargo to maintain a large freighter fleet, yet continue to grow rapidly?
Sergey Lazarev: For ABC, cargo is our core business – the foundation and base for further development. Being purely a freight carrier gives our company a number of advantages by concentrating all our efforts on air freight, be it fleet investment, personnel development, alignment of internal processes with a customer-driven approach, improvement of service quality, etc. We have understood since day one of our operations that the market and customers require a high-quality service, with enough frequencies and capacity. All these parameters could be met only through expansion of our fleet, and a clear focus on operating modern and cost-efficient aircraft. We looked at business growth from a strategic perspective, without being distracted by situational events and circumstances, and stayed focused on our goals.
Q: How has ABC’s freighter network evolved to continue meeting customer demands for air cargo?
SL: We have always built our strategy on a customer-focused approach, being right where our customers want us at the right time. We also take into consideration the requirements of certain industries, the likes of pharma, aerospace, fashion and apparel, e-commerce, etc. With this in mind, we choose only airports with essential infrastructure and facilities to handle certain types of cargo, possessing highly skilled personnel, digital services and other resources. Thus, now it is not just two-party negotiations between an airport and a carrier, deciding on when and where to launch new services, but rather a multi-tier process of negotiations between all supply chain stakeholders, including shippers.
Q: Looking ahead, what kind of impact do you expect capacity constraints, noise restrictions and other limiting factors to have on the operation of freighter aircraft at airports in Europe?
SL: Generally speaking, European cargo hubs have been developing on the base of major passenger airports, being located in close proximity to cities and other residential areas with high population density. We respect and follow governmental restrictions in terms of night curfews for the well-being of local populations. Another thing is slot constraints at airports when priority is given to passenger airlines, leaving freighter operators behind. This is one of the biggest hurdles applicable not only at European airports such as Paris and Frankfurt, but for some of the world’s other major airports, e.g. Chicago, Hong Kong and Shanghai. Airports must find win-win solutions for all the parties concerned, without adversely affecting them, and we are open to discussion.
Q: How do you see ABC’s fleet changing over the next five years?
SL: We most certainly will see ABC’s freighter fleet growing in line with our strategic plans for development and corresponding with the high growth rates ABC has been demonstrating for the last five years. We review and analyze all the options in terms of the company’s development, including fleet, partnership, network, number of aircraft, type of freighters, markets to be served, customer expectations in terms of capacity, cargo requirements and other business areas. We will inform the market and our customers about it in the due course, once the process is finalized and confirmed.
Q: Recently, much attention has been given to Volga-Dnepr affiliate, CargoLogicAir (CLA). What kind of cooperation between CLA and ABC do you foresee moving forward?
SL: Cargologic Air and AirBridgeCargo Airlines have successfully developed a partnership since CLA’s foundation. This is a multi-level partnership, which embraces the operational side, [and] sales and marketing activities. Both carriers aim to bring benefits to customers in different regions all other the world – combining ABC’s expertise, experience and mature market position together with the potential of a young and ambitious European carrier, CLA.
Q: Do you see a need for additional ABC hubs in other parts of the world – say Asia or North America?
SL: Under our current network and business model, our cargo hub in Sheremetyevo International Airport meets our expectations and demands. However, in the long-term perspective, following our ambitious plan for growth and expansion, we believe that we might need an additional hub in Asia or Europe, especially with the evolving demand from the e-commerce sector, and other special cargoes in these regions.