Milanese deliveries
|
Posted Date: 06/05/2008
Issue: Airline Handling International June 2008
Publication: Airline Handling International
This young but dynamic cargo airline headed by a veteran of the air cargo industry is very clear about its handling needs and is able to communicate them with authority. But first, let’s consider a snapshot of what has been achieved by this freight carrier from its Milanese base in its two short years of operation.
“At the moment we have three 747-200s plus a DC10,” comments Massimo Panagia, Chief Executive Officer of Cargoitalia. “We fly a scheduled network. Occasionally there might be a special project but our strategy is to fly scheduled services. We fly to JFK, Chicago, Houston, Mexico City, Prestwick, Munich, Dubai, Kuwait City, Bangladesh, Bombay, Madras and Shanghai. We are also re-opening some routes that were suspended because of the phase-in and phase-out of our fleet. These routes are to Ho Chi Minh City. We will open new gateways in central Europe, Hong Kong and Abu Dhabi.”
Added to its list of achievements is the appointment of Stan Wraight as Chairman of the private Italian cargo airline. Wraight was formerly associated with Volga-Dnepr’s Airbridge Cargo scheduled 747 operation and has developed the gravitas and global experience to reinforce Panagia’s clout in this market. The leadership by these two air freight gurus also affords comfort to Cargoitalia’s investors, Air Logistic Holding and Tristar.
In fact Cargoitalia is the first cargo company to operate in Italy with private and Italian capital. Air Logistic Holding is the controlling shareholder. This is a company belonging to the Syntek Capital AG group, which is a German investment company founded in 2000 and active largely in the media and high-technology sectors; but it has brought some companies operating in traditional sectors – such as Cargoitalia – into its portfolio. Panagia himself is a founding member of Tristar.
Panagia comments: “Cargoitalia started flying in June 2006 and since then we have been building our network. By the time we are two years old we will have something like 20 destinations. We are a network operator and so it makes sense to develop a strong partnership for airport handling.”
Global agreements
At present, Panagia is in intense discussions with a few potential global air cargo handling providers and, he says, it is very likely that in the next few months he will have finalised a global agreement. When asked what is important to Panagia when closing such contracts, he responds: “As a freighter operator, we rely on a portfolio of serious cargo competencies around the world. We very rarely rely on third parties like GSAs. But, having said that, we need an identical level of competence from ground handling partners and this, unfortunately, is not always easily obtainable. In fact, the cargo competencies we need on the ground are not always there.”
With the benefit of his experience he explains that there are some very good cargo handling companies that are very well able to handle freight as a commodity and are experienced and accomplished partners for belly operators that deal with commodity type business.
“But these are, frankly, not the type of partners we are looking for. We are looking for cargo handling operators that have specialised in cargo and therefore can handle the management of any type of business segment and also may be easily tuned to the typical freighter operation,” says Panagia. “All too often we see handlers that are in trouble with the outsized palletisation process and the timely preparation of the flight. This is due, mostly, to the fact that these guys are not really tuned to the typical needs of a freighter operator. We are looking for a handler that can bring these competencies to the table.”
In terms of ensuring Cargoitalia achieves the right levels of service through the contract, Panagia comments: “You have to remember this is a young company entering the market. We have not necessarily been able to negotiate the best deals.” Of course in some unliberalised markets the choices are limited and the service levels and prices are difficult to negotiate.
Panagia has pursued service level agreements as well as a reward system where appropriate. “This relates to premiums and penalties in the case of overperformance or underperformance,” comments Panagia.
Freight flows
So what is the rationale for this all-cargo airline based at Milan’s Malpensa International Airport? Is this simply about accommodating the demand for airlift for Italian imports and exports or are there other opportunities for Cargoitalia?
“Cargoitalia is an Italian company but with a global mission. We claim we will be the reference carrier for the southern European hemisphere in the next three years and, in order to achieve that, we definitely drain Italian freight; but almost 30% of what we carry is not related to Italy,” comments Panagia.
“Cargoitalia has a significant traffic rights portfolio that we have tried to exploit in our schedule and, thanks to this traffic rights portfolio, we have acquired and managed intra-Asian traffic flows as well as south-east Asian business to the US or US business to the Middle East and central Europe.”
He reiterates that almost one-third of Cargoitalia’s total freight carried is not at all related to the Italian market. “I believe that, in prospect, this share is probably going to grow. In terms of total Italian exports we have roughly only 5% of the market but, in terms of the percentage of the Italian market we have based only upon the routes we fly, this share is currently above 20%. Our strengths are definitely related to the deep knowledge of and the deep roots we have in the Italian and southern European market. However, more and more of our positioning is going to be linked to traffic that is not at all related to Italian trade.”
Going forward, this all-freight airline based in the historic trading heart of Europe has its work cut out for it. There are holds to fill, routes to establish and relationships to be built. Not least are those global handling agreements of which Panagia speaks as he searches for partners that have the same deep knowledge of moving freight that he and his team have developed.
Related Headlines
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
Issue Advertisers
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
| > |
