The three cargo carriers are preparing to launch a trilateral partnership which they say will be the biggest and most unique of its kind. Specifics of the pact were unveiled during a press meeting at the Air Cargo Europe in Munich last week. However, despite questions from media people, important aspects (partly referred to as “the magic sauce” by Mark Drusch of QR Cargo), remained vague or completely open in the end.
With their intended move, the cargo trio is breaking new ground. In part, at least, because air freight alliances such as WOW or SkyTeam Cargo – despite all their differences – have existed for some time. Although with limited (Sky) or zero (WOW) success, thus far. As Dr. Ludwig Hausmann, the involved McKinsey representative, possibly unwittingly punned in his opening speech at the press conference: “In the past, aircraft partnerships didn’t really take off, if we are honest!”
New alliance, new opportunities?
Yet, under the motto “It’s time to soar!”, a new attempt is now being kicked off by the triumvirate and is set to launch in the fourth quarter of this year. These are the known facts about this new club: By combining their resources, the three airline companies (which combine a total of seven airlines) want to jointly market the cargo capacities of their fleets which include 30+ freighter main decks and the belly holds of over 900 passenger aircraft. For freight forwarders and air freight shippers, it will not matter which of the three companies transports their respective shipment since standards and service will be aligned. “It’s like working with one airline,” Mark Drusch underlined.
The collaborative advantage: three is more than one. Consequently, the combined available capacity is comparatively higher. In addition, transportation is faster thanks to improved connectivity, faster transit times, and new routing offerings across their six major hubs and combined global networks. “Booking shipments all the way through creates seamless operations and delivers additional value as well as service flexibility to our customers,” Dave Shepherd, CEO IAG Cargo, emphasized at the media briefing. At the same time, the trio is shaping harmonized safety and security standards for their clients, the three executives unanimously confirmed.
Corporate Responsibility component
The Joint Business (as opposed to a Joint Venture – the difference was stressed during the press conference), is built on three pillars of which the first two are standard partnership goals: Network and Operational Efficiency. What does however make this particular partnership stand out, is the third element: that of ‘Returning to the Community’. As a result, the three companies have pledged to provide a combined 1,000 tons of free carriage to the UN World Food Programme (WFP) – the world’s largest organization in the fight against hunger. The WFP supports between 120 and 160 million people every year in over 120 countries across the globe. Though this will be the first global cargo partnership of its kind, the three carriers will each enter into individual agreements with the UN World Food Programme (WFP).
Key moment
Jason Thomas, CEO at MASkargo, stressed that this combined strategic collaboration marks a pivotal moment for his carrier and the entire air cargo industry. “We are excited to partner with Qatar Airways Cargo and IAG Cargo, to deliver a new era of value and innovation to our customers. By leveraging our combined strengths and expertise, we will provide enhanced service offerings, expanded global reach, and cutting-edge solutions that address the evolving needs of the global market.”
Mark Drusch, Chief Officer Cargo at Qatar Cargo, announced that the trio is investing in a common IT platform. This way, the market will be offered a seamless booking proposition leading to a very strong cord of commonality. “The single partnership platform will become a game changer,” IAG’s Dave Shepherd enthused.
No cross-shareholdings
When asked by CargoForwarder Global whether financial cross-shareholding was intended, the three executives denied this. On the other hand, they confirmed, without naming any potential partners, that the trio could become a quartet or quintet in further steps. However, they brushed the question off the table raised by CargoForwarder Global, if LATAM Cargo would join the club as the next member. This issue is currently not on the agenda, they said. However, CargoForwarder Global has reliable first-hand information that negotiations with LATAM Cargo are in a well-advanced stadium.
Important issues were set aside
Regulatory aspects also remained vague at the press conference: For instance, how will pricing be coordinated and executed without violating competition law? Who coordinates the operational processes and is responsible for claims if, for example, a pharmaceutical shipment gets spoiled due to temperature deviation during its journey – say from London, via Doha or Kuala Lumpur to its final destination in the Far East? These and similar aspects should be of interest to customers. But regrettably there was no word to this from the three cargo executives at their Munich press meeting.
