What's the state of the Freight sector?

Published: 15 Mar 2016

Freelance - Freight (March15)

The past couple of years have seen record profits at most passenger airlines as the combination of low fuel prices and rigorous cost-cutting in the aftermath of the financial crash have finally fed through to the bottom line.

Cargo operators have had more mixed fortunes: perhaps unsurprisingly, the cargo divisions of airlines such as Etihad and Qatar Airways have expanded steadily, in line with their passenger activities. However, other freight operations, such as those at Air France and Martinair, have been sharply scaled back. Even in the booming Gulf some cargo operators have gone to the wall or been forced to take a new approach to stay afloat.

So, what are employment prospects like in the coming few years?

“Sadly, we see a continuing challenging environment,” said Glyn Hughes, global head of cargo at the International Air Transport Association (IATA).

Those challenges are coming from multiple directions – the slowdown in Chinese exports is a major concern, he said, while ironically, the rapid expansion of many passenger airlines is having an adverse effect on cargo companies.

“The growing capacity of the passenger business is one of the biggest sources of challenge for the cargo side.” This is because the new generation of twin-aisle airliners, notably the Boeing 777, has so much underfloor cargo space that they are siphoning off business from dedicated freighters.

Additionally, while cargo volume has been growing by around 1.5-2% annually in recent years, there had been a 6% growth in capacity, leading to downward pressure on yields.

However, predicting the death of the dedicated freighter is premature, he added, because main-deck cargo aircraft can still do things that passenger aircraft cannot, no matter how large their belly holds.

That includes moving major consignments of high-value goods such as mobile phones, outsize loads for sectors such as the oil and gas industry and even livestock. Some cargo airlines, such as Maximus of the UAE, have gone down the outsize load route to survive.

And developing economies such as India – which plans to expand manufacturing from 16 to 25% of GDP through its ‘Made In India’ programme – will create some 250,000 jobs in logistics over the next few years. Only a proportion of that number will be in the aviation sector, but it will still result in substantial hirings in the airfreight industry.

Back office functions are likely to require a greater degree of skills over the next few years. Air cargo admin is still largely a manual, paper-based job and, as greater automation is introduced more computer-based skills will be required.

On the piloting front, cargo airlines are not for everyone: “The lifestyle and rostering arrangements are quite different from passenger services,” said John Moore, head of industrial relations at the British Airline Pilots Association (Balpa). It involves a lot of night flying and relatively long, complex flight patterns, although these are compensated to some extent by longer periods off-duty.

However, some specialist freight operator airlines are expanding their pilot force strongly at present. Cargolux, for example, is recruiting 100 additional pilots for its Luxembourg-based workforce and is in the process of setting up a sister airline in China. That should start operating in 2017 and is planning to hire more crews locally.

“Marketing pilot positions in China to western pilots requires a careful and fine-tuned approach so as to attract the right applicants in sufficient numbers,” said Cargolux spokesman Thomas Hempel.

“Specific to Cargolux China, the challenge for the Chinese pilot market is the sheer large numbers required today and in the future. We are establishing an ab initio programme for our future pilot needs solely for assuring the right availability at the right time.”

The Luxembourg-based airline is undergoing a fleet rollover programme, gradually replacing its Boeing 747-400Fs with new-generation 747-8Fs. Its fleet of 26 747s is the largest in its history.

Increasingly, pilots and ground staff at cargo airlines must have an expanding knowledge base of such matters, together with a level of knowledge of cargoes requiring special handling greater than that found in their passenger-flying counterparts.

Rapidly-expanding Etihad Cargo, for example, has in the past year unveiled TempCheck, designed to ensure the integrity of temperature-sensitive pharmaceutical and healthcare products. These often need to be kept within a narrow temperature band otherwise they will start to deteriorate. 

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