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Cargo partnerships expand and deepen

David Harris by David Harris
February 24, 2015
in Carriers, Strategy
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Etihad A330-200F at Farnborough - no credit
Etihad is reported to be planing to lease three of its A330-200Fs to Indian carrier Jet Airways (in which Etihad has a 24% stake.

Both IAG Cargo and Etihad Airways Cargo (which have recently established cargo partnerships with Qatar Airways and Avianca, respectively) have entered new cargo cooperation agreements with other carriers.

Yesterday, IAG announced a strategic partnership with Finnair, under which the two carriers “agree to interline on each other’s metal on a commercially booked basis.” IAG Cargo boss Steve Gunning said the Partner Plus program, which Finnair joined, was more than the usual interline agreement (in which capacity is often available only on a standby basis) because the carriers “treat our partners’ cargo as we would a customer’s.”

Through the agreement, IAG will gain access to Finnair’s network of destinations in the Asia Pacific region, while Finnair will benefit from IAG’s strong position in the Americas and Africa.

Meanwhile, Mumbai-based Jet Airways says it plans to lease three A330-200Fs from Etihad, which has a 24% stake in the Indian carrier. According to a report in Business Standard, The plan is to start with the ACMI lease of one A330-200F in the next few months and later expand. As the business grows, the leases would be converted into dry leases.

Strictly speaking, this would not be a cargo “partnership” between the two, but the reality is likely to be that Etihad gains a stronger foothold in India and South Asia, while Jet gains access to Etihad’s network worldwide.

One point of interest arising from the Etihad/Jet deal (assuming it goes through), is that leasing three freighters to Jet would significantly reduce Etihad’s own main-deck capacity. The Abu Dhabi-based carrier currently operates four A330-200Fs and three 777Fs of its own (with one more of each on order), and ACMI leases two 747-400Fs and a 747-8F from Atlas. With cargo volume growing at an annual rate of 17%, it seems likely that if Etihad does lease out three of its A330 freighters, it will have to order more.

Tags: Strategy
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