The answer for Latin American airfreight?
Avianca’s strategy appears to be paying off, but is it repeatable for the rest of the Latin American market? For a start, increased interconnection is yielding positive results for Aerounion, which registered a 14.5 percent FTK growth into the U.S. between 2014 and 2015. “Aerounion can satisfy our customer base by offering them another gateway to Latin America through our hub in Mexico City. Asian and West Coast customers through this partnership now have the ability to tap into Central and South American markets [including Argentina, Chile and Brazil] connecting to Avianca Cargo network in Mexico,” said Aerounion’s commercial director, Jaime Melara.
From a fleet perspective, Avianca Cargo underscored the importance of maintaining a modern and standardized fleet that is suited to the market, according to Aponte, whose employer supplied Avianca’s fleet of five A330-200Fs. Doing so helps capture volume, especially during peak season, he added. “They reach 100 percent dispatch reliability, which you can only do with a new aircraft.”
Melara noted that, in the face of market volatility, currency devaluation and complex political situations, it was crucial to “tailor your network and operation around such complex challenges.” He added that offering “value-added service is key for a freighter airline to be able to be succeed or fail.” For instance, guaranteed flight-specific services have immense potential for high-value, perishable exports, but involve a large investment in IT that can calculate and anticipate load weights and sizes. End-to-end products are also popular and allow carriers to offer their services to smaller shippers.
But the advice to develop new routes and value-added products is easier to give, than to follow. The transformation of the unwanted Patagonian toothfish into today’s Chilean sea bass took place decades ago, and, as SkyTeam’s Hartman explained, “markets are mature now, and very defined.”
So what is an airline to do in this era of mature and defined markets? Avianca Cargo’s Arango stressed that South American carriers should not overemphasize point-to-point markets. “Constant creativity to solve this issue must be put in place by the different carriers. The operation must be seen as a whole picture, not only a matter of seasonality, load factor or destination.”
And as to new routes, Avianca’s development of the Colombian market shows how an airline can take advantage of underdeveloped infrastructure and extreme geography. As Airbus’ Aponte points out, in areas that are remote or hard to reach due to mountains, jungles and rivers, “You can’t rely on trucks. The best way to reach remote areas south of Bogota is with airfreight.”
“We are already seeing signs of recovery in some very depressed Latin American markets, which have already started to slowly recover air cargo business,” said Melara of Aerounion. “Which, in turn, gives us good expectations for 2017.”
South America has been a difficult place for the airfreight business in the past few years, but through partnerships and new routes, some carriers and forwarders are weathering the storm, and looking at better days ahead – and hoping the world’s appetite for orange roughy and Chilean sea bass continues to grow, regardless of what they are named.