Airports and airlines brace for the e-commerce tsunami

Airlines and airports alike are adapting to the explosive state of affairs of e-commerce, and technology will have to follow suit. That was the leitmotiv of the debate between four airline executives at the Liège e-commerce forum. Glyn Hughes, Director General of TIACA, moderated the session.

Leading airline executives discussed the impact of e-commerce on their operations. Photo: CFG / ms

Full freighter aircraft, high shipment volumes but a gap between capacity demand and transport offer. At the event in Liège, (almost) everything revolved around e-commerce. The segment has become the key growth driver for the air freight industry, particularly on routes between China and Europe. And the boom continues unabated. That was the consensus among the participants as well as the experts in the roundtable discussion.

From caravans to freight planes
Wolfgang Meier, President & CEO of the Azerbaijani cargo carrier Silk Way West Airlines, said his company still has room for growth, as e-commerce currently only accounts for 20% of its total transport volume. The freight airline is building on the relaunch of the Ancient Silk Road, he says. In the past, it was caravans that ensured the exchange of goods between East and West. Today, it is airplanes, but also freight trains and sometimes even trucks. He stressed that Silk Way West is an important partner in the development of the new Baku Airport, an emerging hub in the Caspian region. It will be open to all interested players, once operational.

For Tom Owen, Director of Cargo at Cathay Pacific, e-commerce has been a very pleasant surprise after four difficult, post-Covid years. The segment accounts for 50% to 60% of the company’s volume, compared to 20% to 30% pre-Covid. “This ties into the story of Hong Kong, the largest air cargo hub in the world. If e-commerce hadn’t been around, we wouldn’t have had so many aircraft in service and our fleet would have been younger.”

Jeffrey Van Haeften, Senior Vice President Cargo Commercial Worldwide, stated: “Without e-commerce, the whole industry would have had an issue. Fashion used to be sea freight. Today, new developments triggered by the purchase habits of the younger generation, have brought a change.”

150 full freighters a day needed
Rob Veltman, VP Cargo Europe at Qatar Airways, declared: “We are using the opportunities that the market is offering by adapting our network. We moved capacity to the area where these goods are produced. The top 4 players in the e-commerce industry need 150 full freighters a day and are even looking at sea/air solutions.”

Jeffrey Van Haeften added: “In India, the production has gone up. We are in the perfect storm: while the ocean mode is disrupted, e-commerce is not connected to sea freight. Add to this that B2C is booming and that new products are being launched. Our planes are already full. Delays in aircraft deliveries are a fundamental problem.”

Pearl River
The Pearl River Bay remains the main area of provenance of e-commerce products and not just in Guangzhou only anymore, said Tom Owen. “Dongguan is gaining in importance and the 55-km-long bridge tunnel connecting Hong Kong, Macau, and the mainland offers sea/air opportunities, as well. Hong Kong Airport is expanding its capacity to around 10 million tons annually.”

Emirates is already operating from both Dubai airports, said Mr Van Haeften. “At Dubai International, ground operations are hampered by the heat. Most of the transport will have to be done underground, but there are 5 runways to consider.”

In Qatar, too, the facilities are getting too small, and Qatar Airways is also expanding its fleet.

Artificial Intelligence can support data flow
Parallel to the physical operation, there is also the data flow, with customers needing integrity and seamless data, said Mr Owen. “Four to five leading data services providers are working on a ‘ONE Record’ technology.” According to Wolfgang Meier, there are great opportunities in Artificial Intelligence. “For maintenance planning, amongst others. We are only just at the start of this.”

Yet, the progress in the use of technology takes a different pace in different parts of the world, so it appears. “The European legacy is that they do not like change very much,” thinks Mr Veltman. And according to Jeffrey Van Haeften, the availability of blue-collar workers will also become an issue. “But AI can do the planning,” he hopes.

At the end of the day, the discrepancy between the vibrant business of e-commerce and bureaucracy – like the legislation the EC is working on – may be growing, Mr. Meier fears. “On the other hand, our business is like water. It is always finding its way.”

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