The ABCs of market share

The big three Western European carriers – Lufthansa, Air France-KLM, and IAG – all reported dismal first-quarter cargo results. While there have been some internal issues for those carriers, most observers will be quick to assume that the real problem is an ongoing loss of market share to airlines based in the Gulf Region.

But it is not just Emirates, Etihad, Qatar, and Saudia that the Western European carriers should be worrying about. 3,500 km north of the Persian Gulf, in Moscow, is the hub of another carrier that is also eating a significant share of AF-KL, Lufthansa and IAG’s lunch.

AirBridgeCargo (ABC, the scheduled service all-cargo subsidiary of Russia-based Volga-Dnepr Group) reported cargo traffic in the first quarter of 2015 up 28% y-o-y. AirBridge did not provide a traffic figure (in FTKs), but did say that cargo volume was up 20% in the quarter to 104,000 tonnes.

Although ABC is increasing its focus on North America, its bread and butter remains connecting Asia and Europe via its Moscow hub, and the huge gains make it clear that it is not just Middle East-based carriers that are taking market share from the big Western European carriers. Geographically speaking AirBridge is even better-positioned to do this than the Gulf carriers are. For example, Shanghai to Frankfurt via Moscow is 8,900 km, while Shanghai to Frankfurt via Dubai is 11,300 km – almost 30% farther.

Of course, the big Gulf region carriers have vast passenger networks, and do a tremendous job of connecting second- and third-tier cities in Europe, Asia, and Africa. But for moving full freighter-loads of cargo between Asia and Europe, the northern route makes much better economic sense.

AirBridgeCargo currently operates six 747-8Fs, five 74-400ERFs and three 747-400Fs to 26 destinations in 14 countries. Executive President Denis Ilin has said ABC expects to add another 747-8F in September, adding: “But that is the minimum. We might be more aggressive, and could do two more airframes.”

Find opportunities in the Asia-Pacific region, the world’s most dynamic air cargo market, at Cargo Facts Asia, April 21-22 in Hong Kong. Get more information here.