MALAYSIA Airlines Cargo Sdn Bhd (MASkargo) is offering discounts, reducing capacity and implementing various new initiatives to remain profitable in its current financial year ending Dec 31 (FY09).
The cargo arm of Malaysia Airlines has been suffering a cargo volume decrease due to the global economic downturn.
Shahari Sulaiman ... we plan to introduce new flights. Year-on-year, the company recorded a reduction in cargo volume of about 28% in January and February.
Its Penang operations also recorded close to 50% fall in volume for the first two months of this year.
Managing director Shahari Sulaiman said the terminal charges rebates for cargo transhipped via Malaysia Airlines Advanced Cargo Centre had been increased to 100% for air-to-air, land/rail-to-air, and sea-to-air transhipments from April 10 to September.
“With this initiative, we hope that freight forwarders would be able to increase their transhipment volume. A 5% month-on-month volume increase is already good,” he told reporters during a high-tea session with the media last Friday.
Transhipment cargo constitutes about 60% of the total volume handled by MASkargo at the KL International Airport (KLIA).
The company handled 353,000 tonnes of transhipment cargo out of a total cargo volume of 623,314 tonnes at KLIA last year.
In matching its capacity with the current slowdown in air freight volume, Shahari said MASkargo had reduced its flights out of Pudong International Airport, China, to four flights from nine a week.
“Pudong used to be our biggest station in terms of volume. However, due to the economic situation, we have to make some adjustments. We will start to pump in more capacity once the economy is back on track as China is expected to be the first country to recover from the crisis. We expect to benefit from this due to our large exposure there,” he said.
Overall, Shahari said MASkargo had reduced its freighter and belly capacity by 30% and 7% respectively this year.
“This is better than maintaining our previous capacity with ad hoc cancellations that will hurt our product branding and customers.
“Although there is a huge cut in our overall capacity, KLIA only recorded a 10% reduction in air freight capacity due to our obligation to support the industry in our country,” he said.
He added that any excess capacity would be channelled to do charter business.
“We recently deployed our A300 freighter previously catered to the Asean region to do charter business in the Middle East.
“We also have a 747 freighter in the Middle East to do charter business,” he said.
Shahari said MASkargo’s strategy to maintain a healthy bottom line also included new destinations with potential high cargo volume.
“We plan to introduce new flights to Lagos in Nigeria, Malmo in Sweden and Colombo in Sri Lanka,” he said.
Although hit hard by the challenging economic climate, MASkargo had not been complacent in beefing up its operations quality.
“Our mishandling rate had improved to 0.03% this year. We have installed 50% more CCTVs to upgrade our security level and are participating in the International Air Transport Association’s pilot programme in air freight security,” he said.
On the current economic downturn, Shahari believed that the situation had bottomed out for the air freight industry as he had seen some slow recovery since last month.
“I think we will need at least two years to return to our pre-economic crisis level,” he said.
MASkargo recorded a 1.9% fall in revenue to RM2.67bil in FY08.
Shahari said MASkargo still recorded profit for the period, but he did not disclose the figures.
“This year, we expect lower revenue growth for the first half and expect business to pick up in the second half,” he said. — BY SHARIDAN M. ALI
Source: http://thestar.com.my/maritime/story.asp?file=/2009/4/13/maritime/3678363&sec=maritime, 13 April 2009
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