16 Nov 2017
AN AIR cargo price war was one of the first repercussions of the illegitimate blockade of the State of Qatar, as rival carriers capitalised on the sudden flight restrictions and systematically exploited the unexpected cargo capacity opportunities, writes Thelma Etim.
Competitor airlines – boosted by the measures meted out by Qatar’s neighbouring Persian Gulf countries – took immediate advantage of the political situation by raising extra cargo revenues from their customers.
From 5 June this year, Saudi Arabia, the United Arab Emirates (UAE) and Bahrain – three members of the Gulf Co-operation Council – and Egypt severed diplomatic relations with gas- and oil-rich Qatar and closed their airspace to the nation. At the same time, Saudi Arabia closed Qatar’s only land border, through which some 40 per cent of the country’s foodstuff passes.
Amid the ensuing diplomatic crisis, flag carrier Qatar Airways was required to prioritise the airlifting of food supplies into the country and the airline found itself under intense pressure to source extra aircraft, whilst minimising disruption to its normal commercial operating schedules.
Despite the commercial maelstrom, Ulrich Ogiermann, chief officer cargo, reveals the carrier not only largely maintained its normal operating schedule, but also received “pledges of support” from across its entire customer base.
“Those customers who joined us in accommodating the adjustments, have seen our freighter fleet’s on-time-performance results return to business-as-usual levels and 97 per cent of our schedule is operating as planned,” he adds.
“We attribute this loyalty not just to the effectiveness of our response, but also to the contrasting approaches to pricing which took place immediately after the blockade was announced,” Ogiermann says.
“Qatar Airways chose not to exploit our greater share of Doha capacity. However, customers are reporting [to us] that there are carriers serving other markets [in the region], who are using the embargo as an opportunity to increase their prices.”
Ogiermann admits the diplomatic crisis, which also involves Yemen, the Maldives and Libya’s eastern-based government, presented the carrier with some “early challenges” – not least because of the airlift of food imports into its Doha hub.
“During this period, we received and handled an average of 15 freighters daily, in addition to our normal capacity of cargo services to 60 destinations around the world,” Ogiermann explains.
“These freighters each transported between 60 to 100 tonnes of relief and food supplies, such as dairy, vegetables, fruits, eggs and fresh meat.”
Qatar Airways Cargo significantly increased its Hong Kong freighter services from 17 B777F flights to 21 per week, allowing sufficient capacity for the massive influx of food from Asia.
The carrier, which owns 20 freighters (12 B777Fs and eight A330Fs), also began strategically targeting its capacity towards the Indian sub-continent, as well as offering additional charter services to the commercial market, successful moves which have ensured the preservation of Qatar Airways Cargo’s overall healthy and growing share of global air cargo traffic.
Ogiermann points out that, amid the crisis, the airline experienced a surge in demand for cargo capacity for perishable shipments into Qatar, which has increased from an average of 180 tonnes per day to a remarkable 900.