Despite the uncertainty caused by the COVID-19 crisis and the drastic decline in belly capacity because of passenger aircraft being grounded, Qatar Airways Cargo witnessed substantial growth during the pandemic and has carried the momentum into 2021.
“We have done the most flying during the COVID-19 crisis,” says Guillaume Halleux, Chief Officer Cargo, Qatar Airways Cargo. “For the calendar year 2020, our tonnage increased by 4% compared to 2019. During the month of January 2021, 61% of Qatar Airways Cargo’s capacity was aboard dedicated freighters while 39% was on passenger aircraft. So, cargo is doing great, in fact our global market share in January 2021 is 8.95%. Based on CTK growth (YTD Jan), we are up by 18.3 %.”
In a wide-ranging interview, Halleux talks about the quick thinking that characterized Qatar Airways Cargo’s response to the pandemic, the company’s sustainability initiative, the vital role the company has played in transporting medical supplies and PPE to various regions, plans to expand on existing digitalisation initiatives, and the continuing market volatility. Read on.
Qatar Airways Cargo has been at the forefront of efforts to transport PPE, aid and vaccines to many countries around the world. Can you talk about the thinking behind the decision to play a key role in the global fight against the virus, prioritizing assistance and not profits?
We must remember that we are in this together. As a leader in air cargo services, we think of it as our duty and responsibility to set a positive example and support communities worldwide. We want to help and reach out to those in need of aid and who require support. Qatar Airways Cargo has also played a vital role in maintaining a reliable schedule across our network of destinations. Since the onset of the pandemic, Qatar Airways has helped transport more than 500,000 tonnes of medical supplies and PPE to impacted regions and delivered close to 20,000,000 doses of COVID-19 vaccines to over 24 countries. Partly triggered by the COVID-19 pandemic and given that sustainability is top of our agenda, WeQare was launched in the summer of 2020. Through the first chapter – 1 Million Kilos, 1 million kilos were donated to selected customers who then allocated it to the charities of their choice to transport humanitarian aid, medical supplies and PPE. It was launched at the right time, at a time when vital aid was much required.
What has been the greatest challenge for the company since the start of the pandemic? How was the challenge overcome?
The biggest challenge has been to reorganize our network and schedule to keep the flow of goods continuing for our customers and governments worldwide, operating in very unusual circumstances. In May 2020, 53% of our 1,700 staff at the hub contracted the virus or were in quarantine. Running operations with 50% of your staff absent was very difficult during the peak of the pandemic, there were delays and other issues, but our customers were very understanding. We were the only carrier flying with decent capacity, but it was a big challenge and had to be done in a disorganised way – people had to start working from home at the same time, taking desktops from their cubicles and so on. We have called in people from other departments to help, and even equipment, as in one case few fork lift trucks from catering to load PPE.
Our resiliency and adaptability have been key traits that has helped us in our revival and growth during the COVID-19 pandemic last year and enabled us to move forward despite the enormous challenges. We have done the highest flying of any airline in the world and it has allowed us to maintain sufficient cargo capacity which was good for our customers as they could continue their activities. To support global trade and our customers, we also introduced mini freighters and passenger aircraft for cargo-only flights, putting lightweight packages on the seats, optimising freight capacity on passenger flights, maintaining our freighter network. Throughout the pandemic, we kept communication channels open to all customers at all times. We made it our motto never to fail our customers on the hallmark standard of service that we are known for. Through all of this, the cargo workers truly deserve our praise, what our teams and cargo staff all over the world have done in 2020 is beyond amazing, they have been truly exceptional.
Tell us more about the company’s involvement in UNICEF’s Humanitarian Airfreight Initiative.
Through the five-year MoU with UNICEF, we are working closely with UNICEF and its freight forwarders to prioritise the transport of vaccines, medicines, medical devices and critical supplies utilising our extensive global network and capacity. With our belly-hold network of over 140 destinations, freighter network of over 60 destinations and charter services to non-scheduled destinations as well as our fleet of freighters, passenger freighters, mini freighters and belly-hold flights, we are able to support the logistics around the global vaccination plan. We have transported close to 4 million doses for UNICEF alone.
What is the current status of Qatar Airways Cargo? How much of a recovery have you seen from the depths of the COVID-19 crisis?
We have done the most flying during the COVID-19 crisis. For the calendar year 2020, our tonnage increased by 4% compared to 2019. In 2019, the split between belly-hold and freighter was 52% and 48% but this changed during the pandemic in 2020, where cargo flown on freighters increased to 55% while belly-hold split was at 45%. In fact, during the month of January 2021, 61% of Qatar Airways Cargo’s capacity was aboard dedicated freighters while 39% was on passenger aircraft. So, cargo is doing great, in fact our global market share in January 2021 is 8.95% (IATA Carrier Tracker). Based on CTK growth (YTD Jan), we are up by 18.3 %, this is a great indication of our growth during the pandemic and support by customers. Cargo was the lifeline for the airline and the pandemic put air cargo in the spotlight. We have received three brand new Boeing 777 freighters this year which are being used on key routes and our passenger side is also expanding their network, which means more belly-hold space for us.
What kind of an impact has not having adequate belly capacity had on the company’s business, given that a substantial part of cargo volumes is traditionally moved on passenger aircraft bellies?
We utilise all of our passenger planes for belly cargo in addition to freighters, that is our business model, but the pandemic heavily disrupted our operations. It was total unpredictability. We woke up to 80% of our capacity going, overnight. There was not enough room at the airport for all the planes – airports are not designed to be parking lots. The next day, we unparked 20 passenger aircraft as we wanted them for cargo. We were fast to adapt and support global trade utilising not only our freighters but also using passenger planes as mini freighters and passenger freighters. We have operated over 55,000 flights from March 2020 to March 2021. It includes both freighters and passenger freighters.
As Qatar Airways reinstates passenger flights based on the recent network expansion announcement of over 140 destinations, we expect a natural return to the cargo demand/supply equilibrium, with the belly-hold network continuing to complement our extensive freighter network.
Passenger travel is slowly coming back, but a full recovery isn’t expected until 2023. Have you had to reset goals because of that?
Initially, at the onset of the pandemic, we had to make several changes and adjustments with the huge decline in belly capacity. We used our passenger planes as passenger freighters and also converted six B777-300 ER planes to mini freighters. Now with the passenger network gradually opening up, it is great news for us as we have more belly capacity at our disposal. Of course, we continue to use the passenger freighters and mini freighters as per requirement. Qatar Airways teams developed a second-to-none coordination between the two activities – passenger and freighter and it works well.
During the peak of IATA Summer Season 2021, Qatar Airways will operate over 1,200 weekly frequencies across 23 destinations in Africa, 14 in the Americas, 43 in Asia-Pacific, 43 in Europe and 19 in Middle East.
Earlier this year, the company introduced three Boeing 777 freighters to its fleet. In October last year, it added three Airbus A350-1000. Do you foresee further expansion to the company’s cargo fleet?
The three A350 passenger planes that joined our fleet last year and the three brand new B777 freighters that joined this year are part of our plan is to optimize and rationalize our fleet. Our current freighter fleet of 24 Boeing 777 freighters, 2 Boeing 747 freighters, the passenger freighters, six B777-300 ER mini freighters and the airline’s passenger flights is the perfect mix to support our strategy. Indeed, the combination of efficient belly space, plus freighters where we can flexibly adjust to the needs of the cargo business is the most ideal and cost-efficient combination we have.
Our first task is to fill the passenger flights of the airline (belly cargo). As such, our freighters act as feeders to bring cargo to our hub and connect on our bellies. For the moment, our freighter fleet is the right size and we continuously revisit it to match the growth of our passenger fleet.
Air cargo volumes were less than normal even if revenues were high all through 2020. According to IATA, air cargo volumes returned to pre-Covid-19 levels in January. Are you confident that it would be smooth sailing from now on?
If last year was about surviving and being agile, this year we will be learning and getting used to the new normal, adjusting our capacities and planning around the demand peaks. I cannot say it will be entirely smooth sailing, we don’t know what the coming months will bring – the market is volatile and there is still a lot of uncertainty. 2020 has definitely made us all resilient and stronger to deal with this year’s unique challenges and we should be able to innovate and adapt to different situations as one team.
I believe in the near future, we will continue to be closer and even stronger as airlines and teams, for not only weathering, but also for what we all experienced and learned during this terrible pandemic.
Asia Pacific is the largest region in the global air cargo services market and accounted for 40% of the market in 2020. Do you have plans for expansion in the region?
Asia Pacific is a very important market for us and we are seeing full loads into and out of the region. On a weekly basis, we have 145 flights (freighters, passenger freighters, mini freighters) from Asia Pacific to Doha connecting to several destinations in our network. In addition to this, if you take the number of weekly flights to India, we operate over 100 flights to over more than 10 destinations, like Bengaluru, Chennai, Mumbai, Ahmedabad and others.
We continue to assess the market dynamics; there are several destinations in Asia Pacific that we have tapped into and expanded – even during the challenging pandemic conditions. We are also working closely with our partners on ad-hoc solutions under charter flight programs.
With the massive spike in demand for freighters, many airlines are adding P2F aircraft to their fleet? What is your opinion about P2F as a viable business strategy?
During the peak of the pandemic, we were quick to adapt, making use of our passenger flights for freight only, converting six of our Boeing 777-300ER passenger flights to mini freighters and increasing our freighter and passenger freighter frequencies on key routes. We found this a viable solution and strategy to meet the growing demand for cargo, PPE and other vital aid.
What is the global market share of Qatar Air Cargo in the cargo business? Do you see that improving?
Qatar Airways Cargo was already the largest cargo carrier by FTKs in in the world of 2019. As said above, our global market share as of February 2021 is 9.15% (IATA Carrier Tracker), consolidating our position as a major player in the global air freight market. Our goal is to support our customers and ensure world trade continues. It is essential to maintain the flow of goods and vital aid supply and so we are doing everything possible to support businesses and governments worldwide.
We have a huge charter programme. It used to be one-off charters, but it’s now recurring or permanent charters and through our strong freighter fleet, we are able to support demand, so this is one of the contributing factors to our increase in market share.
Can you tell us more about the company’s digitalisation efforts? How much of an impact has that had on operational efficiency?
At Qatar Airways Cargo, we introduced several digitalisation initiatives such as Robotic Process Automation for shipment tracking, Salesforce (Service Cloud), IATA’s One Record Pilot project with Agility and Champ and eBookings via WebCargo by Freightos that is now live in six countries. Through WebCargo bookings, forwarders in France, Germany, Italy, Netherlands, South Africa and Spain are able to conduct real-time eBookings, access live rates and see available capacity with us. It has been two months since the launch of WebCargo bookings and we have received more than 5000 bookings in those six countries.
Our membership with Validaide also aligns with our digitalisation strategy, offering customers the convenience of making informed decisions for their pharma shipments, at the click of a button.
The pressure and growth for digitalisation has never been stronger than during these times of the pandemic. It is set to bring a massive change to our industry and it is key on our agenda for this year. We are actively promoting it as we see the many benefits our customers will reap.
I know it is a difficult time to make predictions, but where do you see the company in five years?
We will continue to focus on providing our customers with the best service and experience. Our growth will continue, we will further expand our network and frequencies and will consider all new opportunities, we remain open to novel and new ideas. Our ambition is to be the carrier of first choice for all our clients.
Despite challenges due to the pandemic and global economic activity, there will be demand of manufacturing exports. E-commerce is one of the main market drivers at the moment. The airline’s volumes in the segment is expected to increase in 2021 and beyond, given the change in consumer buying habits and how the pandemic has accelerated digital buying. We also are seeing a number of emerging industries that are becoming customers of airfreight, like solar panels for example – that is booming to a certain extent as well.
COVID has accelerated two things: digitisation and sustainable living, this latter one is global and they will be big on our agenda for the next years. Our WeQare sustainability programme is a novel and innovative programme that puts sustainability at the heart of everything we do. Created in partnership with our teams who are the driving force behind the chapters, the programme revolves around the core pillars of Sustainability (economy, environment, society and culture). Two chapters have already been announced and additional chapters will be rolled up in the course of 2021. We have a number of projects planned in the coming years, all based around making our processes transparent and bringing in speed to market for our customers while leaving a legacy for the next generation.
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