From the Cockpit with Saudia Cargo’s Zebitz

Saudia Cargo is operating out of Belgium’s Liege Airport thanks to a 2018 deal inked between China’s e-commerce giant Alibaba and the government of Belgium. The goal is to promote cross-border e-commerce by using Alibaba’s Electronic World Trade Platform (eWTP) and its logistics platform Cainiao to develop a trading hub. Saudia Cargo, which operates flights on behalf of Cainiao, will be entering this new venture minus a pair of 747-8Fs (37562 and 37563). The aircraft were sold recently by parent company Saudi Arabian Airlines to AFG Aviation Ireland, a subsidiary of Aircraft Finance Germany. Cargo Facts sat down with Teddy Zebitz, chief executive officer of Saudia Cargo, to look at what’s ahead for the fleet, and the airline’s innovation priorities. Cargo Facts : Earlier this year, Saudia Cargo began operating flights on behalf of the Alibaba affiliate Cainiao. How's that operation working out? Teddy Zebitz : It's working extremely well, and we have very good cooperation with Alibaba, mainly of course from China and Hong Kong, and it's working nicely. It's a tailor-made solution both to the kingdom of Saudi Arabia but also to Europe and elsewhere, in order for them to deliver their promise to their e-commerce customers. They have some tough targets — 72 hours delivery worldwide — for e-commerce it can only happen with air cargo. Again, that shows how relevant we are to the ecosystem for delivering e-commerce to the end users who are asking for quicker and more reliable deliveries every day. I'm very optimistic about the future. CF : How does this partnership align with your other broader initiatives that you have in terms of e-commerce? TZ: E-commerce is maybe the most significant growth driver in the air cargo industry today. We're seeing that e-commerce is doubling every third year. It’s really driving the volumes within the industry. Customers are asking for quicker and more reliable deliveries. If we can be part of that as a partner, I believe that we are powering the future growth of e-commerce because if it's coming from the U.S. or if goods are coming from China or elsewhere, it can only happen by air cargo, and it shows our relevance. We are working on e-commerce as the primary growth driver for us. We have set some high standards for our reliability and on-time performance. CF : How do you expect Saudia’s freighter fleet to evolve over the coming years? TZ: We will grow our freighter fleet; we will also grow the Saudia passenger network. If you look at the growth ratios right now in the industry, of course coming back to the horrible COVID situation, but we've seen growth rates in the 7% or 8% range. Long-term is probably around 4.5% to 5% growth. So we have to cater to that both on passenger belly but also on the freighters, moving forward. We are looking at long-term growth plans for which type of freighters that we need to acquire for us to participate in this market. And if that would mean growth, the number of freighters will increase over time. We will continue to evaluate our partners within the leasing space. We will continue with different types of aircraft, also the 747-400Fs, as long as they are viable. But there will also be other types of aircraft that we have on the radar. We are looking at different opportunities. CF : Have you evaluated the 777-300ERSFs or other conversions? TZ: We have looked at several conversion opportunities and we are still evaluating. It's all about the customers. It's not about the metal for me. For us, it's about how we serve our customers well. And then secondly, what type of aircraft. CF : How would you describe the current state of innovation on the air cargo operational side? TZ: The industry over the past year, one and a half years, has been a major contributor to keeping the supply chains going around the globe for essential goods and pharmaceuticals and such being a key component necessary to keep businesses operating. The industry has been extremely innovative and agile using passenger aircraft as freighters, also being flexible regarding different types of regulations regarding COVID, and problems dealing with crews’ layover. ... What the industry has proven is that it is resilient and innovative and agile, and has been a key component to keeping livelihoods going. When you talk about general innovation, I think that is now accelerating. It's been on the agenda for numerous years in IATA and other forms. I think that digitization is here to stay, and everybody's trying to find the right solution. CF : What do your innovation priorities for Saudia Cargo look like? TZ: From our perspective, there’s a lot of current technology that can be used. IATA made some recommendations years ago. I think it's a good starting point for us to get the basics right and then work on the more creative solutions for the future based on what the customer needs. When we ask what the customer's needs are, it’s access to capacity at the right destinations and markets, it’s real-time track and trace so they know the whereabouts of their shipments and can transform that into cash or production. We need to work together to find the right solution for going forward with our partners and suppliers because we cannot solve it as an airline alone. It's part of the ecosystem. Being fully transparent on track-and-trace shipments and excess capacity. We're doing that by Cargo.one and other platforms, so we have access to capacity. But also working on track and trace and how we can do that in real-time. Whether we do that via container units with RFID and Bluetooth and other gadgets, but that's the priorities that we're working on now. On top of that, we are working on the sustainability agenda. CF : As passengers start to return to the skies, what role will cargo play? TZ: Cargo is a huge component ... and it's probably never been as significant as it is now. I believe that if you look back a few years, it's about 10% to 12% of the revenue of any given combination carrier. It’s been up to 30% during COVID. For airlines to restart their networks — whether it's on the major stations like London but also for smaller stations — cargo would have to be a huge component for that to be viable and restart the industry. We’re playing a bigger role also for getting back to normality. Cargo plays a huge role if airlines are to operate frequently to both the major and minor destinations, and we see that as role also in Saudia Cargo. This story originally appeared in the November 2021 issue of Cargo Facts .

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