Cargo carriers and forwarders alike probably wish they had had the year that AirBridgeCargo Airlines has had. With an 18 percent rise in tonnage in the first nine months of 2015, compared to 2014, and a 28 percent rise, year-over-year, in tonnage carried in September, the scheduled-freight arm of Russia-based Volga-Dnepr Group has continued to be competitive and relevant.
Denis Ilin, the executive president of AirBridgeCargo Airlines, started his career with Volga Dnepr Airlines in 1995, joining ABC’s management team in 2004 as COO; by 2006 he was the airline’s managing director. Since August 2013 he has been the executive president and has been the driving force behind its success by setting new standards of operational excellence and introducing new networks.
“We’re not growing for the sake of growth; I am trying to respond to what our customers want. We are trying to provide more capacity,” Ilin said. He said the consequence of the company’s attitude to meet the client’s needs, first and foremost, is to be able to react quickly to market dynamics. It’s not magic and it’s not new, he said, but everything ABC does, from routes to destinations, is a joint response to customers and what it takes to accommodate their needs.
ABC is purely a cargo carrier, so it has to be able to carry anything that can be carried. This differentiates ABC from carriers that also earn revenues from belly cargo. “Diversity is what I can do,” Ilin said. “And tightly focus on the customer.” Ilin said ABC is trying to establish close relationships with its customers. To that end, ABC employs its own sales agents, rather than using third-party GSAs. ABC’s client base is global freight forwarders, and Ilin said he likes to maintain a personal touch with his customers and talk to clients personally. Ilin talked about how important it is for passenger airlines to be on time so people can make their connections.
He sees absolutely no difference when it comes to cargo. Flying on time, delivering on time, giving the customer reliable service and consistency, he said, are the toughest parts of ABC’s work.
In September, ABC launched twice weekly Moscow-Singapore-Hong Kong- Moscow service, establishing Moscow as a new freighter link for Changi Airport. Singapore is ABC’s ninth destination in Asia. Mainland China and Hong Kong have been a key market for ABC, and Ilin said ABC’s China-Europe market share has been about 13 percent, which is quite significant. However, due to the economic situation in China, he is aware of the need to diversify, with Southeast Asia a new focus.
At the beginning of 2015 ABC began twice-weekly freighter service from Hanoi, departing every Wednesday and Saturday bound for the Moscow hub via Hong-Kong. From Moscow, the flight connects to ABC destinations in Europe and the United States. Ilin said he thinks Taipei and Taiwan are the next logical destinations in Asia. He added that China to the U.S. is a healthy market, but one that ABC isn’t really in yet – although that could change.
Operating all of the above services, plus three around-the-world routes per week, is challenging, but ABC is managing it with a fleet of six 747-8Fs and eight 747-400Fs (and two more -8Fs to be delivered this year, and every following year through 2020). However, regardless of how big a carrier’s fleet is, it’s almost impossible to fly everywhere, due to limited traffic rights – which is why parent Volga-Dnepr Group has launched Cargologicair, a new subsidiary airline in the U.K.
Cargologicair’s inaugural flight, with a 747-400 freighter transferred from ABC, was scheduled for mid-November, so by the time you read this, the new carrier will likely be in the air. However, while ABC mainly operates scheduled service, Cargologicair will operate more on a charter basis. Ilin said Cargologicair will be used primarily to move freight within Europe, but with the European market obviously depressed, the U.S. would also be served.
“The U.S. and Europe need maindeck service,” he said. So who can compete with ABC? “It’s hard to mention who isn’t our competition,” Ilin said. “Competition is everything; customers have choice on a daily basis.” If his product “sucks,” he said, he’s not going to get the business. Thus, “quality, flying on time and punctuality are key priorities.”
With 2016 just around the corner, market-wise, Ilin is taking a conservative approach. He will use 2015 as a benchmark. “I think we’ll see capacity going down, which creates unmet demand. I think we’ll see our market grow in double digits, but the overall market will be flat.”
But regardless of what has happened in the overall cargo market, Denis Ilin has led his airline into the top five cargo carriers across the world in 2015, and achieved DAP (delivered as promised) of 87 percent this year – a performance he is planning to equal (or improve on) in 2016.Like This Post