16 minute read
Qatar Airways Cargo Exclusive interview with Guillaume Halleux, Chief Cargo Officer.
Qatar Airways flying high with Cargo accounting for significant revenue source
During the peak of the pandemic in fiscal year 2020-21, Cargo contributed QAR 18.5bn representing 64% of the Group’s revenue.
During the peak of the pandemic in the budget year 2020-21, Cargo contributed QAR 18.5bn (US$ 5.08bn) representing 64% of the Qatar Airways Group’s gross revenues. In 2021-22, Qatar Airways Cargo continues the sizeable contribution to the Group’s income as it is one of the few airlines operating in certain sectors to ensure that its customers and the global community receive the supplies they require.
Guillaume Halleux, Chief Officer Cargo, Qatar Airways, waxes eloquent on the performance of the carrier in this exclusive and exhaustive interview with Global Supply Chain.
Global Supply Chain (GSC): Briefly, give us an overview of Qatar Airways Cargo in terms of where it stands in terms of performance and scale of operations among the global airfreight carriers?
Guillaume Halleux (GH): Before the pandemic, 20% of the airline’s revenue came in from Cargo. Our market share in 2019 was 6.80% and it has certainly grown during the pandemic. In 2019, we transported close to 1,470,000 tonnes which increased by 3.45% in 2020 and much higher by 14.02% in the year 2021. In March 2021, our market share was 9% with a 21.9% growth (YTD March 2021).
Currently, we are ranked number one with a market share of 7.95% (as of February 2022 YTD). We are immensely proud of our customer base and the business relationships we have nurtured for years. Ease of doing business, proactive communication, transparency of information, accessibility and innovative solutions are all qualities that our customers expect and value in Qatar Airways Cargo.
GSC: How significant is the UAE and the GCC region for Qatar Airways Cargo?
GH: UAE and GCC are an integral region for Qatar Airways Cargo; we have always been a major player in these markets assisting our customers in both import and export activities. While the UAE/ GCC market is considered as an import market rather than export driven, Qatar Airways had consistently maintained a significant presence in the GCC region.
Prior to the blockade we served these markets with more than 25 passenger flights daily out of the United Arab Emirates, more than ten flights daily
out of Saudi Arabia, 11 flights daily from Kuwait and seven flight daily into Bahrain. This was also complemented by our freighter operations; with eight weekly freighters into Bahrain, five weekly freighters into DWC (Dubai World Central) and three weekly freighters into Kuwait.
Following the lifting of the blockade in January 2021, we resumed our operations from UAE and KSA, with our market presence positively received by our loyal customers from day one. Our main priority has always been to cater to the needs of the market, building a strong market presence in each country and ensuring our customers get the best possible service.
The development of Free Trade Zones in the region will serve as key enablers that will help in the economic development and foster exports from the region. The region’s carriers are already investing in facilities, infrastructure, digitalisation, sustainability and fleet to fulfil the objectives of the national vision.
GSC: How is demand currently holding up?
GH: The exports of perishables, personal effects as well as oil and gas shipments continued to be present in the market and given the notable shift from retail to online, we have seen a clear surge in e-commerce movements from the region.
Demand is still expected to grow in the coming year with more oil and gas projects restarting while investments in cargo infrastructure in many countries within the GCC have begun. It is also important to note that Qatar Airways Cargo operates globally so we are still seeing a consistent pipeline of demand for air cargo across the globe.
Guillaume Halleux, Chief Officer Cargo, Qatar Cargo. GSC: How did the pandemic impact your operations and bottom-line?
GH: When Covid started, a significant percentage of our belly capacity was grounded. We went from 60 to 180 daily cargo flights. Our staff strength was impacted due to the pandemic. However, as part of Qatar Airways Group, we received support from other subsidiaries and departments that extend their staff support to us, ensuring flights are turnaround, cargo space is filled, and the supply chain is complete.
On top of this, we set up a China Customer Service department and staffed it with our Mandarin speaking cabin crew, where some of them have now chosen cargo as their new career path. We were firing on all cylinders because Qatar Airways does not view cargo as a side project but as a central pillar in the airline.
Qatar Airways was the first airline in the world to effectively manage the crisis, and one of the first to turn to the ‘preighter’ solution. We introduced Covid-19 related safety measures – the team was agile in their approach to enhance the service levels while being flexible and innovative, ensuring an intact cool chain when transporting more than 600 million vaccines worldwide.
HIA Cargo Terminal Features HIA Cargo Terminal Features
Cargo capacity: 1.4 million tonnes per year Aircraft parking facilities: up to 11 code F Freighters Cargo capacity: 1.4 million tonnes per year ULD capacity: 1005 main deck units Aircraft parking facilities: up to 11 code F Freighters
Cargo Complex area: 292,000m2 ULD capacity: 1005 main deck units
Cargo Terminal building: 55,000m2 Airside Climate Control Centre: 2470m2Cargo Complex area: 292,000m 2 220 temperature-controlled positions for units requiring refrigeration Cargo Terminal building: 55,000m 2 Cargo Agent building: 5,000m2 Airside Climate Control Centre: 2470m 2
220 temperature-controlled positions for units requiring refrigeration Cargo Agent building: 5,000m 2
A manpower sourcing programme was established – allowing us to maintain operations while keeping competencies and training at required levels, without compromising safety, security and occupational health and safety (OHS).
Additionally, our ground handling partner QAS Cargo, in collaboration with our teams and relevant other carriers, ensured that cargo flows were controlled and managed to cater for available capacity–considering the tremendous dynamics across the network. This helped to prevent congestion.
GSC: How many destinations worldwide does Qatar Airways Cargo operate freight only flights? What are your top 3 destinations for out-bound cargo?
GH: We have an extensive network, with more than 150 belly-hold cargo destinations (passenger flights where cargo is carried in the belly of the planes) and over 60 freighter destinations where we operate freighters only. In addition, we also operate charters to destinations not included in our scheduled network. Our top three stations with the highest cargo uplift in the past three months are Hong Kong, Frankfurt and Amsterdam.
GSC: How significant is belly-hold cargo on passenger flights for Qatar Airways Cargo?
GH: Belly-hold cargo is an important part of our business model and we always welcome additional belly capacity as it is cost efficient, which is appreciable in an industry where yields are always under pressure. Belly capacity is planned daily, and the high frequency count is a key selling point for high yielding products like express or pharmaceuticals.
At cargo we always receive a lot of support from the airline. In fact, Qatar Airways Group Chief Executive HE. Al Baker has always believed in cargo. Therefore, we have hardly any A380s, instead, we have opted for the cargo friendly Boeing 777 passenger flights.
GSC: How did Qatar Airways Cargo perform in 2021 and what is your outlook for 2022?
GH: We have seen recovery over the course of 2021, as aircraft movements, airport cargo operations, and passenger Doha - tonnes per year
1,763,000 2,028,000 2,199,000 2,216,000 2,353,000
2016 2017 2018 2019 2020
numbers have all increased. At Hamad International Airport (HIA) in Qatar, Fact Sheet - March 2022 there was a 41.37% rise in passengers served in 2021 compared to 2020. Airport cargo operations increased by 20.71% in 2021, with 2,589,283 tonnes of cargo handled at HIA in 2021.
Aircraft movements also grew by 28.12%, with a total of 169,909 aircraft take-offs and landings at HIA. As Covid restrictions loosen, it would also allow many businesses across the supply chain to better forecast and manage due to a reduced level of uncertainty.
Demand for air cargo will continue to grow in future and consumers will pay more to have goods delivered within a shorter timeframe. With buying trends continuing to be online, we will be seeing e-commerce soar in 2022 and beyond. This means that the demand will be higher, and we have the right fleet for this purpose. The supply chain will remain tight in 2022 given that Covid and its variants continue to be present.
We expect volatility to remain in the short term as we are not fully out of the pandemic, however the capacity crunch will gradually ease off as more aircraft
take to the skies. We can adjust to market dynamics, improve our business offerings and drive new customer engagements.
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 the brandnew Hamad International Airport with its state-of-the-art facilities. Qatar is an ideal hub-and-spoke gateway, with many airlines preferring to route traffic through a central hub and optimise transport efficiency. Investments have been made by Qatar in significant infrastructure projects as the country 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 are the only cargo carrier with growing market shares since 2010. Air cargo serves a specific function in the supply chain and if 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: What are your short- and longterm expansion plans & vision for Qatar Airways Cargo?
GH: Air cargo is pivotal in supporting countries worldwide, and we have seen how important it was during the pandemic. To cater to our growth and future demand, we are investing in a brand new, state-of-the-art Cargo Terminal 2 with an additional capacity of 3.4 million tonnes.
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.
A greener supply chain will be the focus for us and there are several opportunities for us to contribute towards sustainability in multiple areas such as climate and energy, weight and waste management and water usage reduction.
Safety is also high on our agenda and is incorporated in our short and long-term vision for the airline. Over the next five years, we will be replacing our entire fleet of more than 10,000 ULDs with Safran Cabin’s Fire-Resistant Containers. We have already received the first initial batch in September 2021. The new containers allow us to prevent safety issues related to the increasing risk
posed by lithium batteries shipments and related goods such as smartphones.
GSC: How important is the Cold Chain for Qatar Airways Cargo?
GH: The cold chain is paramount to maintaining product integrity and efficacy. QR Pharma is one of the strongest products for us. Our global market share for pharmaceuticals exceeds 11% (Financial year 2021-22) of the total airfreighted pharma market, reaching above 15% during the peak of the pandemic. This has more than doubled since we launched our product which really speaks about how far we have come and how much our customers trust us.
GSC: What innovations did Qatar Airways Cargo implement in recent times for the Cold Chain sector?
GH: Having received CEIV Pharma certification in late 2020, we introduced Envirotainer’s Innovative Releye® RLP container, offering customers high-level yet cost-effective, and sustainable cargo protection. In July 2021, we became a member of Pharma.Aero as well as the Cool Chain Association, to collaborate in defining the highest standards in the shipment of valuable pharma goods and ensuring sustainability in transportation by avoiding integrity deviations leading to medical or food wastage.
Following the strong success of the
Freighter Fleet
2
Boeing 747-800 Freighters
2
Boeing 747-400 Freighters
Passenger Fleet
Key belly-hold aircraft
58
Boeing 777s
37
Boeing 787 Dreamliners
26 1 1
Boeing 777 Freighters Airbus A310 Freighter Boeing 777-300ER Mini Freighter
10
Airbus A380s
53
Airbus A350s
14
Airbus A330s
Releye® RLP, we now offer Envirotainer’s innovative Releye® RAP containers to our customers. These containers have low weight and offer the best value operating cost as well as the lowest CO2 footprint in the air cargo industry, in line with our sustainability agenda. We also signed an agreement with Validaide in 2021 to provide customers detailed station capabilities and lane risk assessments on key routes at the click of a button.
GSC: What role did Qatar Airways Cargo perform in the transportation of vaccines during the pandemic?
GH: While we considered ourselves a market leader even prior to the pandemic, the situations and challenges we faced over the past two years are invaluable for us. As borders around the world began to close at an unprecedented rate, we found ourselves in uncharted territory; our schedules and capacities were no longer something we could take for granted.
We have carried more than 600 million doses of Covid-19 vaccines around the world. Qatar Airways Cargo, the freight division of Qatar Airways has signed a Through the Memorandum of Understanding (MoU) with UNICEF, we are supporting UNICEF’s Humanitarian Airfreight Initiative for a five-year period. We are working with its freight forwarders to prioritise the transportation of vaccines, medicines, medical devices and critical supplies utilising our extensive global network and capacity.
We are building 2 new terminals to handle Live Animals and imports and exports from Doha to give room for the expansion of the current Cargo Terminal 1 with the construction of Cargo Terminal 2.
GSC: Tell us more about the agreement signed by Qatar Airways Cargo with SAL (Saudi Arabia) in October 2021?
GH: Through our agreement with SAL Saudi Logistics Services, we offer fast and efficient handling for all types of cargo including cool chain cargo at Saudi Arabia’s main airports that we fly to, namely Riyadh, Jeddah, Dammam, and Medina. We share a common vision of customer centricity and service excellence with SAL.
GSC: Do you plan to open new destinations in the region or globally?
GH: We plan to increase frequencies on existing routes and operate to new destinations.
Recently, we have introduced two new charter partnerships: the first one with Cainiao to support e-commerce growth in South America with the launch of a weekly Boeing 777 freighter service linking Hong Kong and São Paulo: and the second one being daily Boeing 777 charter freighter from Zhengzhou to uplift hi-tech, garments, ecommerce and many other commodities for few of our key account partners.
GSC: What new products / initiatives (if any) do you plan to launch for Qatar Airways Cargo this year?
GH: Qatar Airways Cargo is continuously working on improving and innovating its products portfolio to adapt and be at the fore front of the industry. We are reinforcing our cool chain management procedures and adding TARMAC equipment to further protect the goods during transit.
We are building 2 new terminals to handle Live Animals and imports and exports from Doha to give room for the expansion of the current Cargo
Terminal 1 with the construction of Cargo Terminal 2. We have also been working on our Quality Management System and obtained industry recognised certifications such IATA CEIV Pharma and Live and currently pursuing the IATA CEIV Fresh certification as well. There are a number of initiatives planned under digitalisation and sustainability, however, we will make announcements soon.
GSC: Do you anticipate any mergers and acquisitions in the short -term future?
GH: Mergers and acquisitions are also positively shaping the future of air cargo traffic and if we find suitable opportunities, we will consider and review.
GSC: Are there plans to boost the Qatar Airways freighter count?
GH: We anticipate a growing demand
Apart from our own fleet of 28 freighters and more than 200 passenger or belly-hold planes, we have also leased five additional freighters to cater to the growing demand.
for air cargo that includes ecommerce, perishables and pharmaceutical products. In January 2022, when Boeing launched the Boeing 777-8 freighter, we announced our order for 50 such freighters. Featuring the advanced technology from the new 777X family and the proven performance of the market-leading 777 freighter, the 777-8 freighter will be the largest, longest-range and most capable twin-engine freighter in the industry.
With payload capacity identical to the 747-400 freighter and a 25% improvement in fuel efficiency, emissions and operating costs, the 777-8 freighter will enable us to operate more sustainably and profitably, allowing us to operate to even more destinations while increasing frequencies on existing routes, which will also boost our charter product tremendously.
Apart from our own fleet of 28 freighters and more than 200 passenger or belly-hold planes, we have also leased five additional freighters from various providers based on customer requirements to cater to the growing demand.
GSC: Any additional and relevant comments / observations you would like to make?
GH: As the State of Qatar moves towards FIFA 2022, it is an exciting time for us in Qatar Airways, as we work with FIFA on managing the environmental impact due to the event. As the Official Partner and Official Airline of the FIFA World Cup Qatar 2022™, we are pleased to be part of the first Carbon Neutral FIFA World Cup.
There are more exciting things happening at Qatar Airways Cargo on all fronts including new chapters under our WeQare programme and we will make more announcements in time to come.
While innovation comes in many forms, ours are centred around our customers and partners by going through the pain points they face and how to offer a seamless customer experience. This is what sets us apart.
