In June 2013, Abu Dhabi-based Maximus Air, one of the largest specialist cargo operators in the Middle East, grounded its fleet of five A300-600s, terminated its ACMI-lease contracts and began restructuring. This year, the all-cargo charter airline has re-emerged with plans to offer door-to-door delivery for cargo of almost any size, plus freight forwarding services for air, sea and land transport modes. Air Cargo World caught up with the new Maximus Air CEO, Mohamed Ebrahim Al Qassimi – a co-founder of Air Arabia and former advisor to GE Aviation – to discuss the new “one-stop-shop” forwarding venture and some of his expansion plans for what looks to be a busy year.
Why did you decide to enter the forwarding market with this new door-to-door service?
The rationale behind this new venture is based on the fact that, up until very recently, freight forwarders have been the oil that keeps global supply chains running. They are a vital component in ensuring that international trade maintains pace with the increased speed in which business transactions and the worldwide transportation of goods now takes place… While the freight forwarding market dipped 3.3 percent last year, the forecast through to 2017 remains bright, with a 6.7 percent CAGR being projected by [market research firm] Transport Intelligence. Like Maximus Air, many in the freight forwarding industry are looking at ways to adjust their business models to reflect the changing nature of the global economy, and maximize their share of this global growth.
Does the move into freight forwarding signal a shift away from air cargo flight operations for Maximus?
No. Air cargo operations were what Maximus Air was founded upon and will remain a core part of our business operations. This is our bread and butter, if you like, and we see no reason to change something that isn’t necessarily broken. We are encouraged by the positive economic forecast that has been predicted by IATA, and we are targeting 20 percent growth over the coming few years. We will have to work hard to achieve this, as with any company seeking to achieve double-digit growth, but the opportunities are most definitely there… Middle Eastern cargo airlines continue to outpace global markets. Regional carriers recently reported 7.8 percent growth and IATA have also said that robust growth in global air freight industries is very promising.
Maximus is currently operating one An-124 and two Il-76s – all ACMI-leased from Ukraine Air Alliance. Will there be any changes to this fleet arrangement?
We are always looking to add new aircraft to our fleet but, like always, we will only do so if we think it will add a new dimension to our offering and maximise the potential for creating new cargo flows and revenue streams by doing so. This is a vital part of our new growth strategy, but for now our plans are focused on consolidating business and creating demand-driven services that are good for business.
Does Maximus Air have any other expansion plans for 2015?
We want to hit the ground running and start the year… but we are also aware of the need to ensure business operations are sustainable, both in the short-term and from a longer perspective. As such, expansion is something we will be looking to achieve through a number of phases staggered across the year. However, while carriers outside the Middle East continue to face the combined challenge of overcapacity [and] weak demand … our approach is more about sustainability than it is about being overly cautious.
Do you plan to return to ACMI operations or scheduled service?
Not at this point in time. But who knows? The ACMI industry is definitely changing, and the motivation behind ACMI customers’ decisions to lease freight aircraft has changed dramatically. Whereas before companies might have leased a freighter to test out a new service before committing to the purchase of a new aircraft, for example, the ACMI customer mix has diversified to include airlines, freight forwarders, and charter brokers, etc. This presents fantastic growth opportunities if you get it right, but at this point in time it is not something that we are actively looking into.
What are some of the growth markets you see ahead?
Some of the main drivers in African markets have been urbanization and stability. While not directly linked to air freight, these two factors have enabled economies to grow, and have prompted increasing demand for the import and export of wholesale, retail and manufactured products, which accounted for over two-thirds of the continent’s GDP in recent years. Africa is also home to five of the world’s dozen fastest-growing economies and has seen 6 percent growth in demand for air cargo in 2014 – second only to the Middle East. Linking the supply chains between these two key regions therefore holds many benefits for our business operations, as regions like Latin America and others are struggling to reverse 6 percent negative growth in FTK.