The implementation of new objectives for air freight growth and solutions to fight competition in the sector in 2008

Résumé du document

According to the book "The airline business in the Twenty-first century" by Rigas Doganis (Routledge, 2001), the air freight represents less than 1 million tons a year, in the international exchanges in France, (0, 16 % of the total volume), when compared with the long-distance road traffics (approximately 190 million tons), maritime (215 million tons), railroad (16 million tons) or river (18 million tons). This marginal activity in volume was rarely in the foreground of the infrastructures preoccupations. Airports were planned for passenger traffic needs, and the air freight was usually considered as a complement for companies. Though air transport concentrates on passenger purpose rather than freight, this last has shown faster progress in the last few years. This evolution is a potential source of revenue if the marketing strategy of airline companies is well adapted to customers' demands. The market of the air freight is in the process of full development with the crushing appearance of integrators, such as Federal Express, who are swiping more and more market shares in this sector.

Extraits

[...] The express transport becomes a stake in competition between integrators and traditional carriers. The freight transported by cargo aircraft, will dominate. It is probable that new companies will look for free access airports, cheap and well served by road as Vatry or Châteauroux SOLUTIONS TO INCREASE THE AIR FREIGHT POSITION IN OUR COMPANY The freight and the post represent, in weight, more than a quarter ( of the air traffic). This proportion is widely superior to the corresponding revenues (12 although airline companies, as airports, make rarely this distinction (Le transport aérien, Pierre Merlin, Que sais-je, 2002). [...]

[...] This predominance in shares of the air freight market is due to their total packaged solutions for clients. In order to understand how important the development of freight in Air France- KLM is and which solutions are adapted to this situation, we will, on a first step, analyse the actual facts of the air freight market and the main source of competition, the integrators, and then bring out solutions and objectives thanks to perspectives of air freight in the future. [...]

[...] So, in other words, in the case of our company, we have to increase the frequency of flight to respond to the demand of customer and to differentiate our products from integrators. Obviously, we cannot suggest same full package solutions like integrators do. But we can fight on one point: the price. Of course, we could not propose door-to-door services or traceability of the parcels, but we can compete on basic solutions based on flight frequency, worldwide coverage, delay and price. [...]

[...] The air freight allows customers to use less wrapping, thanks to an environment more favourable to transport. Costs are reduced thanks to packaging cuts, which will allow economizing weigh cost of air freight. 5/6 AIR FRANCE Consulting The insurance costs show a saving, one more time thanks to the favourable environment of transport of goods. The air freight brings important account advantages. Most of the international exchanges are made on the basis of credit. By air freight or 3 days are enough which save weeks of delivery time, and weeks of cash flow RECOMMENDATIONS As a conclusion, the air freight would be an opportunity to develop and increase our results and our awareness as the first carrier of people and freight in Europe. [...]

[...] The imbalance of the freight traffic between both directions is less problematic than for the cargo flights, because the profitability of the flight is acquired with the passengers transport. On a worldwide scale in 2006, of total traffic both in tonnage and kilometres per passengers is carried in mixed aircraft holds” considering the book Le transport aérien of Pierre Merlin (Que sais-je, 2002). The duality of exploitation of mixed and cargo aircraft explains why mixed companies deal their freight and passengers transport on the same airports: that is why a big part of the Air France freight on the airport Charles-de-Gaulle is in connection. [...]