A new partner for lonely ABC?
Russia’s Volga-Dnepr Group has been largely silent on plans for its newest offspring, UK-based startup carrier Cargologicair. The Russian parent company has no explicit documented ties to the new carrier, which sources say will start ACMI services by the end of the year. However, Cypriot businessman and president of Volga-Dnepr Group, Alexey Isaikin, is a Cargologicair director, and the shareholder is V-D’s Amsterdam arm. Further, several of the newly recruited staff have a Volga-Dnepr background.
Denis Ilin, executive director of AirBridgeCargo (ABC, the scheduled-service subsidiary of the Volga-Dnepr Group) told Cargo Facts that the new carrier would be useful as an interline partner. Sources have indicated that a UK AOC, while expensive, is attractive because of its market credibility and traffic rights possibilities. ABC, meanwhile, as a Russian carrier, is struggling to extend its network, which is why Ilin and sales director Robert van de Weg have been noisy in the media about looking for a European airline partner. Ideally, they want a tie-up with Martinair, but it appears that AF-KLM (Martinair’s parent) is not playing ball.
Still, ABC is not doing too badly without a partner. It recently announced that cargo volumes have risen significantly – up 17% in the first eight months. Its growth trajectory has been fairly steady this year, varying only between 20% and 16% year-over-year, according to the airline’s monthly announcements. However, as one source noted to Cargo Facts: “ABC is suffering on cargo into Russia due to the sanctions, plus the purchasing power of the ruble being curtailed – whatever statistics it may produce. You will note ABC always releases tonnage increases – nothing ever about revenue, and not even in the vaguest of terms.”
The source indicated that ABC may be buying market share. “The reality for Europe is that Far East & China capacity is being sold cheap.”
But a forwarder source said that ABC’s mature routes, including to Asia, were priced at a market level, and only its new network to the US was “very” cheap as it tries to establish itself in the market. Mr Ilin, meanwhile, denied that ABC was buying market share. “We are trying to be competitive, but on a level with the market. We are not undercutting.”
It would appear, however, that ABC’s strong growth in volumes does indicate that it is taking market share from the European legacy carriers. IAG Cargo saw volumes fall 2.1% in the second quarter to June 30, while Lufthansa Cargo said volumes were flat with a slight 0.5% rise in the first six months. One carrier that has withstood ABC’s competition is Cargolux, which has seen volumes rise between 5% and 6% this year.
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