Super Performance: Qatar Airways Cargo passes 2022 with flying colours

‘Next Generation’ Vision enhances digital transformation at the carrier

With an overall eye-watering tonnage of more than 1.7 million tonnes in 2022, Qatar Airways Cargo effectively and successfully managed a broad range of shipments, many demanding and challenging, the carrier’s performance is flying into the record books.

It has been a rewarding and productive year for Qatar Airways Cargo in 2022. The carrier successfully adopted and applied the ‘Next Generation Revenue Management’ Vision powered by Wiremind to all its areas of business and the results are there for all to see. It brought in enhancements to its services and operations, accelerating the carrier’s Digital Transformation process.

Global Supply Chain engaged exclusively with Guillaume Halleux, Chief Officer Cargo, Qatar Airways, for an extensive interview on a broad array of subjects ranging from the reasons for their stellar performance in 2002 to the introduction of ground-breaking concepts, especially the ‘Next Generation’ Vision. The following are the transcripts of the interview.

GSC: The past Year 2022 was a year of great accomplishments for Qatar Airways Cargo. Briefly, enumerate the achievements?

Guillaume Halleux (GH): Firstly, the ‘Next Generation’ has been a milestone, a turning point in our development and the way cargo business is done.

We introduced Digital Lounge, which offers customers a more connected and improved e-booking experience and is part of our omni-channel strategy where we also offer users access to three other booking platforms, namely WebCargo, CargoAI and CargoOne.

We launched two chapters for WeQareChapter 3, Let’s Stand Together, was about collecting donations for children; and Chapter 4 called Diversity, celebrated our highly diverse team in the form of a livery on our Boeing 777 freighter, showing the portraits of selected staff.

We are also one of the first airlines to gain the CEIV Lithium Batteries certification which is a rightful recognition of our active and vocal involvement in the issue of lithium batteries transportation.

Other successes include the order of 50 777-8 freighters, expanding our commitment to the Boeing 777X family. The 777- 8 freighter will be the world’s largest twin-engine cargo jet with the highest payload capacity and a 25% improvement in fuel efficiency, emissions, and operating costs and developing a strong relationship with ACMI (Aircraft, Crew, Maintenance, and Insurance), providers in 2022 and expanding our cargo fleet by introducing 2x74Y,1x77X and 1x31Y, allowing us to expand to new cargo markets.

Furthermore, we expanded our freighter capacity in the Middle East, with the launch of structural 77X operations to Dubai and Riyadh. We also initiated new partnership agreements, providing a broader destination portfolio to our customers. As examples, we have partnered on the passenger side with Malaysian Airlines, Royal Air Maroc and Finnair, as well as with China Airlines, providing us with reliable capacity at Taipei and expanding our presence in Asia with block space agreements (BSA).

Finally, Qatar Airways Cargo won ‘Air Cargo Week’s Cargo Airline of the Year’ Award for the second year in a row and also received the Development2030 Corporate Social Responsibility Programme of the Year at Aidex 2022.

2022 has certainly been a year of opportunities and we are proud of the results. Our tagline ‘Moved by People’ is engrained in every employee and all of these achievements would not have been possible without their dedication and hard work.

GSC: Qatar Airways Cargo played a seminal role in the transport of pharmaceutical products in 2022 and the Covid-19 period. Provide us the details.

GH: We are in constant dialogue with our freight forwarding partners, Pharmaceutical & Healthcare shippers, industry associations and NGOs and we network with them through participation in industry events and initiatives. Feedback, learning, and evolution are adopted with our own product offerings as well as in our operational procedures.

At Qatar Airways Cargo we believe in leading by anticipating current and future industry needs to develop our products and respond to these in the most extensive way. An example is the quick introduction of the QR Covid product in January 2021 to respond to urgent industry calls for a higher level of security and monitoring for the transportation of Covid-19 vaccines.

Additionally, a five-year Memorandum of Understanding was signed with UNICEF during this period to support their efforts in vaccine distribution as well as Aid & Relief goods. During the pandemic, we were one of the few cargo carriers that continued to operate into many restricted markets and to support the movement of crucial lifesaving medicines, vaccines, personal protective equipment (PPE) as well as aid and relief materials around the world. Our customer-oriented approach and commitment helped us earn the loyalty and trust of our customers who will continue to work with us post-pandemic as well for their logistics needs. Pharma & Healthcare continues to be a vital part of our future investment, business and development. So far, we have transported more than 1.5 billion doses of Covid-19 vaccines. from the sea carriers and road carriers with an impact on certain verticals like sea air and perishables. On the other hand, with oil price levels remaining high and with most of the economies within the Gulf region still dependent on the oil and gas sector, the demand for the transport of oil rigs and associated equipment is one of the bright spots for this year.

GSC: Tell us about the ‘WeQare Programme’ and the different Chapters? GH: The idea for the WeQare programme came about when we became the number one cargo carrier. We wanted to give back to communities we serve and leave a legacy for the future generation, and lead by example while putting sustainability at the core of our operations through concrete actions designed by and for the air cargo industry.

So far, we have launched four chapters: These are:

GSC: How significant is the UAE and GCC region for Qatar Airways Cargo? How is demand holding up in the Middle East region?

GH: The GCC region is an important region for us, where we operate both freighter and passenger flights to 13 destinations, offering more than 2,500 tonnes to and from the GCC weekly. Effective from end 2022, Qatar Airways Cargo introduced two new Freighter stations in its network – Dubai World Central and Riyadh.

Apart from the supply and demand factors impacting the air freight dynamics in the region, there are macroeconomic, political, security and regulatory factors that contribute to the airfreight development. However, when we look at the worldwide growth projections for 2023 and with the Middle East positioned as a major transit point and hub for airfreight, we are looking at a challenging 2023 as the Middle East is expected to grow by 3.6% in 2023 in accordance with the latest IMF figures.

With less congestion in ports and more schedule integrity provided by carriers, we are seeing a strong competition coming

Chapter 1–One Million Kilos: The Covid crisis accelerated the launch of this programme to transport one million kilos of aid and relief goods. We involved our customers by allowing them to allocate the space to charities of their choice.

Chapter 2–Rewild the Planet: This chapter was launched to offer free transport to bring wild animals back to their natural habitat. Under this chapter, we have so far transported seven rescued lions from Ukraine back to Africa.

Chapter 3–Let’s Stand Together: This chapter consisted of collecting donations for children which were assembled in Doha and then distributed to charities worldwide.

Chapter 4–Diversity: This chapter celebrated our highly diverse team portrayed on an airplane livery with the slogan ‘Moved By People’.

GSC: How many destinations worldwide does Qatar Airways Cargo currently operate freight only flights?

GH: We have an extensive freighter network, currently flying to more than 70 freighter destinations globally. In addition, we operate charters to destinations that are not part of our scheduled freighter network.

GSC: What is the outlook for Qatar Airways Cargo in 2023?

GH: 2023 comes with uncertainty, as macroeconomic trends, as well as lingering geopolitical issues are expected to continue to slow down the overall economic growth, directly impacting air cargo. Markets such as ecommerce are expected to continue rising, however, so is capacity both on air and ocean and therefore, we don’t expect demand to exceed capacity growth. The global stabilisation of yields, specifically out of certain markets, will require Qatar Airways Cargo’s usual adaptability and flexibility, as well as customer centricity to ride the wave and strive to maintain our global leading position. As the world’s leading air cargo carrier, we see it as our responsibility not only to grow our business but to ensure we are contributing to sustainability.

This will be our focus for 2023 and beyond in every area of our business. We will continue to make investments which are key to the future growth and beneficial for our customers’ businesses.

GSC: How many destinations regionally and globally does Qatar Airways Cargo cover? What are your top 3 destinations for out-bound cargo?

GH: We operate belly-cargo flights to more than 150 destinations globally while we fly freighters to more than 70 destinations worldwide, covering six continents. Stations from which we uplift the most cargo are Hong Kong followed by Frankfurt, Amsterdam, Guangzhou, and Oslo.

GSC: Going forward, what opportunities and challenges do you foresee for Qatar Airways Cargo in the region?

GH: Qatar Airways Cargo is perfectly and strategically positioned at Doha’s Hamad International Airport with its state-ofthe-art facilities. Qatar is an ideal huband-spoke gateway, with many airlines preferring to route traffic through a central hub and optimise transport efficiency. Qatar has made significant investments in infrastructure projects as it aspires to become a world-recognised logistical centre with the development of free trade and logistics zones expanding.

Our growth is proven by the FTKs, we have been the only cargo carrier with growing market shares since 2010. Air cargo serves a specific function in the supply chain and as long as we continue to offer an affordable, efficient and reliable service, this will remain the case. In terms of challenges, we have navigated through huge challenges such as the blockade and then Covid.

GSC: Comment on Qatar Airways Cargo’s Sustainability and CSR initiatives.

GH: In addition to our WeQare programme, we continually explore ways to reduce our carbon footprint through various initiatives such as improvements in operational efficiencies, process enhancements, digitalisation, fleet modernisation, effective waste management and carbon offsetting. Our environmental sustainability commitments include:

Working closely with the industry stakeholders in leading global efforts to reduce carbon dioxide emissions; meeting and exceeding industry best practice standards for Noise and Air Quality and preventing pollution and meeting compliance obligations and other requirements that Qatar Airways Group subscribes to.

We are also committed to improving our performance through Environmental Management Systems; raising awareness across the Group and promoting the training of employees & stakeholders on our Environmental Policy and maintaining a zero-tolerance policy towards the transportation of illegal wildlife and their products.

Accordingly, we incorporate sustainability requirements into our business planning, and we are constantly enhancing our procedures and protocols to support conservation and biodiversity, including raising awareness on Environmental Policy. In fact, Qatar Airways Cargo is the first carrier in the Middle East certified to the highest level of IATA’s Environmental Assessment programme (Iona)–State 2.

Qatar Airways has played an important role working in collaboration with the industry in leading the efforts to tackle climate change, aligned with the Qatar National Vision 2030 as well as the fourpillars strategy of the International Civil Aviation Organization (ICAO) and the International Air Transport Association (IATA). As part of Oneworld® alliance, Qatar Airways has committed to Net-Zero Carbon Emissions by 2050, taking part in the first global alliance united behind a common target to achieve carbon neutrality.

The alliance has also committed to a target of 10% sustainable aviation fuel use by 2030. As part of this commitment, Qatar Airways has signed an offtake agreement to purchase 25 million gallons of certified SAF over a five-year period starting from 2028. Despite the challenges of SAF supply, Qatar Airways is determined to advance its efforts to meet its targets.

We are also continually reaffirming our commitment by investing in the youngest fleet and most advanced aircraft technology while maintaining the lowest ratio of fuel burn towards a greater reduction of carbon emissions. Since 2015, we have implemented over 70 optimisation initiatives that became legacy projects implemented through our Fuel Optimisation Programme.

In 2020, Qatar Airways Cargo became the first carrier in the Middle East to join the IATA Turbulence Aware data exchange platform, a programme which ensures a smoother journey in the air with a lower fuel burn.

Our sustainability programme also includes market-based measures such as carbon offsetting. In 2020, Qatar Airways partnered with IATA to launch Voluntary Carbon Offset Programme for Passengers and in November 2021, Qatar Airways

Cargo became the first carrier to join the IATA CO2NNECT platform offering voluntary carbon emission offsetting to its cargo customers. In January 2022, we have introduced a carbon emission calculator on our website, marking a new milestone in our environmental sustainability journey.

At Qatar Airways group, we are committed to contributing to a better world. Qatar Airways Cargo is involved in many charitable, environmental, and humanitarian initiatives, including encouraging and supporting our employees in acquiring new skill sets for a more sustainable future.

For example, we work with Airlink, a US-based global disaster logistics non-profit organisation that supports 130 charities and NGOs responding to natural and manmade disasters. Thus far, we have transported over 250 tonnes of relief supplies and reached 11 countries, which has benefited 2 million people. It is very humbling to see so many lives being impacted. In March 2022, we renewed our agreement with Airlink, pledging a further 500 tonnes of free cargo space over three years.

GSC: What are your short- and longterm expansion plans & vision for Qatar Airways Cargo?

GH: In 2022 we invested in a number of initiatives providing a much more connected booking experience to our customers. This year, we will be taking this journey forward by elevating this experience with more enhancements with clear operational strategies to complete the journey of cargo till its final destination.

We launched ‘The Next Generation’, and ‘VISION 2027’ in 2022. Through these strategies, Qatar Airways Cargo is defining its role in the industry. Digital enhancements, new products, a new website, and more is being rolled out under The Next Generation. This approach will be reflected across our network and operations, be it in technology, sustainability, diversity, the new generation of employees joining our company, our products and services, and how we approach our business in general.

To cater to our growth and future demand, we are investing in a brand new, state-of-the-art Cargo Terminal 2 with 3.4 million tonnes of extra capacity. This cargo facility of the future will be safe, smart and green, relying heavily on technology and automation for its material handling. It will offer faster storage and retrieval and cargo processing, enabling us to offer shorter connections to meet the growing demand for transit cargo.

This building will be built on LEED (Leadership in Energy and Environmental Design) rating framework, which is the most widely used green building rating system in the world. We will focus on a greener supply chain and on opportunities to contribute to sustainability in areas such as climate, energy, weight and waste management and water usage reduction.

GSC: How important is the Pharma Chain and the Cold Chain for Qatar

Airways Cargo?

GH: The cold chain is crucial to maintaining product integrity and efficacy of pharmaceuticals and healthcare products. Pharma is one of our strongest products with a global market share exceeding 11% (Financial year 2021-22) of the total airfreighted pharma market, reaching above 15% during the peak of the pandemic.

GSC: Do you plan to open up new destinations in the region or globally?

GH: Our Group CEO recently announced seven new destinations, 11 resumptions and 35 frequency increases at the ITB Berlin. This announcement is also important to cargo since we will be carrying shipments in the belly of these passenger planes.

The seven new destinations planned for launch in 2023, are Chittagong, Juba, Kinshasa, Lyon, Medan, Toulouse, and Trabzon. Qatar Airways is also resuming flights to 11 destinations: Beijing, Birmingham, Buenos Aires, Casablanca, Davao, Marrakesh, Nice, Osaka, Phnom Penh, Ras Al-Khaimah, and Tokyo Haneda. At Qatar Airways Cargo, we are always looking for ways to support our customers’ business and if the requirement arises, we will be introducing additional frequencies.

GSC: Do you anticipate any mergers and acquisitions in the short -term future?

GH: Mergers and acquisitions are positively shaping the future of air cargo traffic and if we find suitable opportunities, we will definitely consider and review.