Cargo Chat: Air France-KLM maximizes small freighter fleet in route planning

Before launching a new cargo route, Air France KLM Martinair Cargo considers multiple factors, including demand, airport infrastructure, aircraft needs and regulatory compliance. [caption id="attachment_57287509" align="alignright" width="300"] Carl Hendriks, director of network planning and full freighter management at Air France KLM Martinair Cargo[/caption] “We have a couple of factors that trigger network changes,” Carl Hendriks, director of network planning and full freighter management at Air France KLM Martinair Cargo (AFKLMP), told Cargo Facts . “They can be commercial, like new opportunities, new flows, connections, customers reaching out. But also, geopolitical dynamics could be a trigger to change the network.” AFKLMP must also consider its aircraft when developing routes. On some routes, the aircraft will need multiple legs to complete the journey, and it is vital to have MRO capabilities at each destination airport, Hendriks said. The carrier group has six A350Fs on order after it canceled orders for two in March following news of Airbus’ delivery delays. Three of the A350Fs are scheduled to join KLM subsidiary Martinair, which will be the first in the group to operate the type, and the other three are scheduled to join Air France, AFKLMP told Cargo Facts in March. The carrier expects its A350F deliveries to begin in 2027. The A350Fs will replace Air France’s two production 777Fs and KLM’s four 747-400Fs , which have leases that can be extended “to ensure the continuity of full-freighter operations,” the group said. The carrier group operates: Two 2009-vintage 777Fs (32965 and 32966); Three 2003- and 2004-vintage production 747-400Fs (33694, 33695 and 33696); and One 1990-vintage 747-400BCF (24066). Hendriks sat down with Cargo Facts for a discussion of the carrier group’s cargo routes strategy. What follows is an edited version of the conversation. Cargo Facts : What are the key considerations when determining whether to launch freighter routes? Carl Hendriks: Low or high financial results can drive changes to add or to reduce capacity and fleet. ... Some aircraft types require different routes in the sense that some flights are short, some flights are long. Let's say some aircraft types need a longer hour-to-cycle ratio. So, we also tend to be mindful of every stop we make to ensure that value is actually created for the network, to avoid or to actually minimize your maintenance costs, because if you do a lot of takeoffs and landings, your maintenance costs will increase significantly. So, we also are mindful of that. Cargo Facts : How do existing airport facilities, infrastructure and the like play into your decision to implement new routes? CH: We need airport slots. Availability there at the right time to actually make a schedule work, but definitely also facilities. The geographical location of the airport and the runway length: Those are key drivers to actually calculate your performance to be able to create a profitable business case. So, for example, in let's say South America, there are some high airports like Quito (UIO) and Bogota (BOG), and we cannot depart from those airports with a fully loaded 747 into Europe. So, you need to stop in between, like in Miami (MIA), for example, like many carriers do. You also need to have your ramp handling and your warehouse handling available at a competitive rate. Cargo Facts : How much does maintenance factor into your decision-making when planning routes? CH: Especially now, [at] our KLM-Martinair sites ... we have a fleet of 747-400s and those aircraft tend to be aging right now, and so we are definitely also more mindful of the maintenance situation. Cargo Facts : When considering new routes, does accessibility to supporting third-party MROs play into that decision? CH: Yes. We have engineering support in every station where we operate, usually that is on site, preferably in-house. Cargo Facts : What is Air France-KLM's process for responding to events that affect routes, such as war, natural disaster, or changing policies in an origin or destination country? CH: There are various factors there. Obviously, there are the immediate threats, and those are monitored by security services within KLM, so they monitor the situation across the globe, determine whether it's safe to operate there. So that's actually affecting the day-to-day operation, and they actually divert aircraft around certain areas if needed. So that's the short term. In the mid- to long-term scenarios, we tend to take those into account as well. For example, with flights from Europe to Asia, you need to circumfly Russia and Ukraine at the moment and [consider tensions in] countries in the Middle East. And we take that into account in where we make a technical stop and in the overall cost calculation. Those factors tend to, or can, have an influence on whether to operate on a certain route, and then, in terms of natural disasters, we have the option to offer charter flights. ... For example, recently for a hurricane in the French Indian ocean areas, Air France jumped in to operate a few freighter flights. Cargo Facts : Another external factor is the current trade war. The EU has put a ninety-day pause on retaliatory tariffs against the United States. And though the U.S. has paused its reciprocal tariffs, there's still that new 10% flat tariff . How do you think that's going to affect your air cargo operations and therefore your route optimization? CH: That's the million-dollar question at the moment. We have a small freighter fleet, so we are largely dependent on belly cargo, where we’re dependent on the passenger network. That's actually the majority of our trans-Atlantic business. So, we have limited exposure on the key cargo trade lanes, especially on the trans-Pacific. We actually have no exposure. So, we don't expect any impact there. We do expect some impact on the trans-Atlantic with those tariffs obviously. [We also expect] some indirect impact, possibly on the Asia-Europe traffic, where we see a different supply-and-demand balance in the industry that could affect rates and actually also the level playing field. That is, at the moment, also a bit of a concern on our side, that the Chinese carriers are operating across the Russian airspace, whereas we have about two hours extra of fuel burn to circumfly the area of Russia and Ukraine. So that's putting us at a disadvantage compared to the Chinese carriers. Cargo Facts : How much does peak seasonal demand within the regions play into your decisions to expand your route network? CH: We try to benefit from the seasonal demand, obviously to serve our customers, but also to improve the bottom-line results. But there are certain factors that actually limit us: We have year-round contracts with certain customers that we need to respect, so we're not too opportunistic there. A key driver that's limiting flexibility in terms of seasonal demand is actually the airport slots rules. We actually need to fly 80% of our slots to keep the slots. So, we can have some opportunistic route changes, but we also need to be mindful of covering those 80% of the slots. And that's actually especially important at our home base , Amsterdam , which is super congested, so actually, not operating at 80% implies losing your position there. Cargo Facts : How do fuel costs and sustainability initiatives at Air France-KLM influence route selection and optimization? CH: Sustainability is an important pillar in our organization, with investments in [sustainable aviation fuel] (SAF) and also contracts with customers to procure SAF , not only on freighter routes, but obviously also on the intercontinental belly flights. And another important pillar of the sustainability perspective is fleet renewal. We have invested in Airbus A350 freighters and will be one of the first ones to actually take delivery of those new aircraft once they are delivered. Unfortunately, Airbus is delaying that a little too much, in my humble opinion. Let's say, we'd rather have them today than in three years from now, but we're looking forward to that, because that is a significant reduction of fuel burn of about 40% compared to the 747-400 we're operating today. So that will be a game-changer in terms of sustainability, but also noise pollution. Register now for Cargo Facts EMEA, an essential regional event for industry stakeholders, on May 6-8 at the Shangri-La Bosphorus in Turkey.

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