Qatar Cargo will make its freighter network more responsive to market conditions as part of efforts to increase profitability – with changes to its Americas network coming in September.

Speaking to Air Cargo News, Qatar Airways chief cargo officer Mark Drusch said the carrier was looking to adjust its freighter network more quickly to changes in market demand and not be led by the passenger side of the business.

This will see the carrier utilise its freighters on routes where demand is high and fully allocated aircraft are required while the belly network will be utilised in markets where it can cover demand at a lower cost.

“[The cargo market] swings much more quickly [than passenger]” he said. “However, cargo networks haven’t responded to how quickly the market changes.

“I think that’s something that we can also teach the cargo side of the world – that you can move your assets around to respond to peaks in demand in one region and reductions in demand in another faster than the passenger side can.

“I think because a lot of the freighter operations within airlines were with passenger, they still had the mindset that we can’t move as fast – but we are changing that internally to say we can move the freighters a lot faster.

“We don’t have to move at the same pace as passenger because we don’t have the same constraints and the same requirements as passenger.”

In line with this approach, Drusch said that in September freighter capacity would be moved out of the Americas to focus on Asia and India with some extra capacity also added into Europe.

Earlier this week, CargoForwarder Global reported that the airline would discontinue its four Boeing 777 freighter flights per week to South America and stop flying to Atlanta.

The move comes as capacity from the Central/South America region has surged over the past year.

Figures published on Friday from data provider WorldACD show that cargo capacity based in the region is up 22% year on year, while demand is up by the lower amount of 7%.

As a result, rates achieved by cargo being flown out of the region is down by 6% compared with a year earlier.

While rate performance from the region has been on a downward trend, prices from Asia and the Middle East have this year surged.

The WorldACD data shows that rates out of the Middle East/South Asia are up by 54% compared with last year and for Asia Pacific they are 24% up.

Meanwhile, US and European carriers have put in “a ton of capacity” on the Atlantic over the past three years, he said. This is reflected by a near 18% year-on-year decline in rates from Frankfurt to North America in June, according to Baltic Airfreight Index figures.

Drusch said the key to managing these types of network changes while still catering for customers is making sure there is enough belly capacity on the carrier’s own flights or by utilising the network of partner airlines.

He pointed out that Qatar Cargo has the biggest partner network of any cargo airline.

Following its September network adjustments, for the flights from South America, Qatar Cargo could utilise its partnership with LATAM and Iberia, while across the Atlantic it has tie-ups with British Airways and American, he said.

“We are integrated with a massive passenger airline plus, among all the freighter operators, we have got by far the biggest partner network established today so that as I move airplanes around, a customer shouldn’t worry,” he explained.

“If I move an airplane out of a market, it’s important that I can refill or recapture a lot of that capacity through my vast global partnership network that other carriers don’t have.”

He also pointed out that Qatar’s widebody passenger operation is flown using 777s, Boeing 787s and Airbus A350s which have a large amount of cargo capacity for passenger aircraft and can carry anything from Ferraris to lions, although he admitted there would be some very specific types of cargo that can’t be carried in bellies.

Another challenge with having an increasingly responsive network is quickly gaining access to markets.

“A lot of the Asian markets are booming so much that the ground handlers have limited capacity to expand, or there are slot restraints because airports are so full, or you’ve got human resource constraints where they can’t find people to handle it,” said Drusch.

“Vietnam, Hanoi, is slot constrained and capacity constrained – horribly so. Macau is severely capacity-constrained. Hong Kong and Japan are human resource-constrained. These are the markets that are booming so we have some real challenges there.”

He added that in India there were constraints on warehousing.

Working closely with handling and airport was key to negating these issues, he said.

Drusch added that as well as responding to cargo demand, there was also a need to deploy capacity into markets where a good product mix could be achieved to generate as much revenue as possible.

“Improving unit revenues is my goal because that will then improve profitability,” he said.

“You really have got to look at what is the revenue on board and then look at whether you have more space to put more revenue on board – could you have made a better balance, a better mix of product to generate a better unit revenue, better total aircraft revenue.”

Key to improving freighter network profitability is data and Drusch describes himself as a data junkie. He said Qatar Cargo has been investing in its business intelligence tools to provide better visibility.

Back in April, Drusch told Air Cargo News that the airline was integrating far more data to understand the flows of markets to better assign capacity and price to reflect the market.

This would give the carrier a more dynamic and analytical approach. In line with this, the carrier recently launched a new PROS revenue management system.

Looking ahead to the peak season, Drusch said he is expecting a buoyant demand.

“I am looking at this summer and it’s been much stronger than we anticipated,” he said.

“August is looking strong, relative to August last year and so if that’s any indicator, I have a feeling the September through December period is going to be extraordinarily strong.

“We’ve already started planning with the head of our hub how we are going to handle what we believe will be a much bigger September than anybody expected.

“We have had some days this month, where we carried as much through the hub as we did during some days in the middle of Covid.”

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